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Estes Park Colo July Mr Archibald Kains Federal Reserve Bank San Francisco Calif dear 4 1r Kains Your letter of July 24th has just reached me here deal of pleasure indeed You can imagine how distressing it is to be laid on the shelf even for a limited time and particularly at this time when it seems as though the fruit of the last t years work is just beginning to ripen Ye tie good WI et sympathy are very much appreciated although e4er Oa in t savage Scotch way which you affect and whici I know c m e right from the heart I am not going to be at le lay geilf this year but it will be possib e for in P doLee fishing and I am hoping to commence t i week i e very excellent trout stream that runs right th o gh this alley All of the Go ve writ ten to me or to the office expressing the goo f 66 1i1igs and sympathy at which sometimes I am incline t wonder on account of the rather ruthless manner in ey have been treated occasionally at our conferences airman I do not need to tell you thai the greaVe re I have had in the association with t overnor n to watch the development of good feeling eh has led 118 to accomplish many things that and has given me a great would hay pendent of ossible had we been working cilite inde r Abou that fishing you mentioned if it should come back to yo444 mind next spring I would be strongly tempted to run ovete to the MdCloud River and join you there for a little flailing if you are able to arrange it It vould not be possible for me to travel that distance this year before the fishing is over I au not afraid of the Scotch or the Indians or the combination for I assume that there is a proper supply of mountain dew and the other accompaniments of good fishing but best of allwwhat is needea is goo company which I would look to you to provide We are delightfullY settled here ie a cottage attached to the hotel where I have an officelittlefrom whlch and I keep 111D an active correspondence with New York Just now I have been working up the Bank of England arrangement which the Board at Washington mast act upon pretty soon Drop me a line now and then when the spirit moves you Very truly yours With warmest regards BENJ STRONG Jr PERSON L sbruary My dear Governor Itins Thank you for your letter o the 4th in regard to the 4istribution of the gold bind After consideration the Committee decided that it would not be fair to make the distribution without giving the oontributors the privilege of accepting Few York sc clvnge and of course most of then will take a4vantage of that I am very mnrry that it could not be arranged opportunity the other may but vie did the bost oo could 71th kindelt regards believe no Very tr07 your Governor Archibald Rains Esq Govornor Foderal Rsaervo Ala of San Frmnoisco Omn Frmncisoo 3S Jr RAH 26 L January 29th 1916 dear Yainl Thank yo 7 for yrar ntes not and 17cod wishes nt from Chicago Lehall certinly take the opportunity to becow acnuaintk d with the Bank of Scotland people through the courtesy of Vr Crimble and of course will see Z T Jones at the Inff kong Thanghai Bark and the rs of the Chartered Bank wonder what kind of a fix I will be in if the voluminous notes In crnnectien with my trip should be scooped by the censer Once more my sincer regrets that you are not We could accomplish more and besides that going with mo have a goof time Yo 1 can of course consider yourself one of the Tulare at 1718 H Ftreet 11th best regards and prosperity to you and to ymr bank I m Sincerely yours Al XanS sq Federal esorve Bank San Francisco Cal CONFIDENTIAL hay 31st 1916 Dear Governor Kleine Your favor of the 25th ihet is just received Since i saw you in New York I have discussed quite fully with the Pederai Reserve Board the various terms of the eieleorandum which I zeowed yo e confidentially and eub sequently have submitted to them a requeet for some action with respect to operations contenplated by the terms of the eiemorehdum You will of cour se recognize that an account of that character involve sone responsibility when it seems Lectionary to purchaee bills abroad It night be that some of the Fedelal Reserve banks by reason of an ample demand for discount from their members etc would be disinclined to continue their participation Likewiee when we bought bills in Nee York for our fcreign corres ancient it would be necessary to have all twelve banks obligated to assume their share of the reeponsibility for the payment of such bills So I have suggested to the peard that whatever arrangement is made for the man agoment of the accounts in behalf of the whole system should be sufficieetly formal and binding that they ooeld rely upon the partnership holding together even when it involved some sacrifice in the interest of the country ao a whole to conduct such operations To A tains Esq May at loath to make a definite suggestion as to the character of the relationship or the agreement abroad as we will be assuming a good deal of responsibility here and I wotld like to eller it as much as possible with others who are fateilisr with business of this character Would it not therefore be possible for you to prepare an outline of an arrangement to be entered into by the twelve recerve banks or those Who care to Join it which would protect ell parties and enable uu when the time came to operate leAeta the assurance tat we could count upon the peemanency of the arrangement In view of the eonfidential character of the mem orandum which I snowed you I do not feel at liberty to disclose it to other members of your k ommittee but it herdly seezie necessary to do eo as the principles irvolved are simple and can be covere by a memcrendum in general terms 1 am returning the erclosuree sent with your letter and thank you for your cooperetion Very truly yours Governor A tins esq Governor Federal Reserve Bank Skn nruncizeo tial BS Jr VC1Ae 5 Eetes Park Col September 2nd 1916 My dear Keine l have three letters from you unanswerild and haoten to make my apologies The princiapl reason h4ribeen a slight 1 indisposition for a we or so which preVentedjet keeping up t with my mail Your letters have 4j yk me a gr deal of pleasure and I hope my own lapse ill discourag you about writing Reports of theD 414ston ting have reached me and I not judge that while maiy i e poit dec ns were made it did clear up a good de of mieund stadding between the banks about varioqi f ollection system I am sorry 10Lat ee as I krlyvt you are that it is developing with a certain lack A of unif r ity whi h later is bound to cause trouble I do ev not like ieettreeee Of one bank like Atlanta or Chicago exhib iting too much enterprise in developing short cuts before the other banks are ready or willing to undertele sibilar departures The difficulty you refer to about the 2 ells Fargo Nevada national Bank has been experienced in New York where relations between the big New York banks and Chicago seem to throw things out of balance it the New York banks all the big banks of As I understand have ticmChicago accounts and their Chicago correspondents object to their sending items through the reserve banks On the other hand the Chicago banks do not hesitate to use the seevices of the reserve system so the To Sept A Kaine Esq exchanges are naturally thrown out of balanct The par list is a formidable document but of oouree for the present oomething of a bluff It is a good answer to Mr Glass who was threatening all sorts of attacks upon us for our failure to start the collection system in real earnest If you get your directors to give you a month s vacation and then run over tLe mountains here and rioefnd it with me i I will divide the time between fishing and par friAlections and believe we could work out a scheme of eame satisfactory Up to date we have ka4 job I You and Charlie Moi q kin0 hat would be too ma0 ooks on the ld be able to work dome thing out of your oont roverte OY the state bank situation in your district but t7 not N e e u can afford to recede from your i o long a end gales T position 1 ou Drake by st Company wrote me about Y 1 you knov imi remain a Scotchman name of the Los An the Jinks I wonder if ri TWei have asked me for the last four or fivb ut unfortunately business interfered years to h tte In regard to the English arrangement I was sorry not to be able to mite you before the Conferende in reply to yours of the 18th we have discussed Your proposed report covers just the ground from time to time and puts the Committee on record as opposed to the development of the foreign exchange bueiness along lines which will be competitive with our own membership Your suggestion about handling the matter in 3 To Sept A Keine Esq The question of compensation to the New York reserve We really do not make any money in bank is of no consequence handling the investment account for the other reserve banks Our total commission account of t24 000 looks big on paper but if the work involved were really charged with the actual cost phis overhead I doubt if it could be shown that there was any dividend of profit in it thing but an Irish f course we account just as econor cally as possible but rates of interest abroad arsa4a p 4 so much higher would handle the foreign than here that the commission would mRpear to possibly a lower rate would A a My suggestion of 6 N 1 had hoped wculd maat 411 aK7e York bank handlin 7 oo i far as compensati lusti iu from th etart to supervise the business le objections as to the New pro o tion of the business and so large t goes w 71 Gommitthe G arger and e rir 1l agree to anything that that nference d termines 7 Another objection to having an agont in New York is 1 ion of 44ponsibility Who would decide the policy the q and reallyatakethe final responsibility Would it be the If I were an officer of a reserve bank in another dietrict I would much prefer to rely upon the agent or the New York bank Federal Reserve Sank of New York than any individual agent have covered the ground in your report by providing that You the agent shall conduct his operations under the supervision of the Governor of the iederal deserve sank of New York and the responsibility will rest on that bank notwithstanding that each of the banks has an agent of its own in New lork which seems to me to be anomalous To A Kains Esq Sept Further I do not believe that the Federal Reserve Board desires or that the Federal reserve banks would agree that the actual businese transactions should be subject to the direction of the Reserve Board Their power of supervision extends e long way but is clear enough and their authority when it comes to determining all the questions which arisq in buying bills that muet always rest with the mane ement of each i bank I I have stated above my impressiarte q4 about yoar report and wish you nese criticising the would yr lets me Ih scheme wk grankly qual frank aid out S64r with which you are now thoroughly familiN N Your letter friiiii Chk 76 hove that your inf aeEence had On ther encouraged me to be ngly exercised with Harding and Delano le complete tle English arrangement as prompt ly as poe ei eand New York indicate also that these efforts ere succeszful I do not care what reaction this may friends We have got to go ahead and oporate an theeeleevr directs and authorizes and of course whenever have up our Teutbdic Germany is in position to deal with us we can make eimiler arrangements there if they are willin to put the account on a gold basis Otherwise I would not do business with them or with France or with any Other country Don t let us worry about the commission matter which you also refer to in your last letter for we want no more than to get our reasonable expenses back 5 To A Keine Esq Sept don t mind saying to you personally that it would suit me infinitely better to have the Federal Reserve Bank of New York go it alone on all foreign business cate and difficult account to handle It is a deli There are only two or three men in the System who really understand the business and the idea of handling money belenging to the other banks in transactione of that character and incurring th9iresponsibilie tiee involved does not appeal to me a bit thing is that 44 important the arrangement as outiindsl g been needed between the London and New York banksfept in principle and when fully in e were in Now York to41k alon tely sound e rati the entire system and add imm is all detail and can l a is abtiek e will be or benefit to our prestige ure worked out ith The rest I wish you on these things It is sickening to be co d re just at the time when the finishingeas el on these important matters Before the next meeting takes place in Washington why can t y figure 4 a spending two or three days with me so that e we can go nwAr 1 he program together before the meeting I will likely be in Denver by that time which will save you at least two days time if you are willing to travel on that old Western Pacific Your letters are like a breeze out of a Bohemian grove and I hope you will write me whenever you get opportunity I hope that you are planning to attend the Convention of the American Bankers Aseociation in Kansas City this month To A Kains Sept It is more than likely that some attack will be made On us and I think our representation should be as strong as possible so as to prevent any hostile movement which might be made Cer tainly there should nt le A be some one from your bank My best regards old man and many thanks for not forgetting me Lthfully yours A Kains Esq Federal Reserve Bank San Francisco Cal BS VCM Estes Park Colo September 11th 1916 My dear Kains to get Yours of the 6th is just received and 1 am mighty glad what you describe as half baked stuff which really rep resents your best opinion I knew about the foreign arrangements After reading through your letter a couple of tites find there is really no disagreement between us at all We both agree that an account of the inportance of this one must be operated as one account and not as twelve notwithstanding your remarks about the bank in which you served and in which you car ried various accounts with the Bank of Scotland The bank to which you refer of course did a regular commercial exchange business through all their agenices buying and selling exchange om and to their customers in the usual way serve banks will have no customers dealing in foreign exchange All of our business will be done in the open market of any leuportance where can be purchased when we when we aee liquidating The Federal re open market exchange in are accumulating The only large volume balances end sold balances is New York ivory one of the twelve banks could start a foreign department and they would do their business through New York just the same as they would under the proposed arrangement 2To A Kains Fee Sept You and I must not blink at the facts in this matter and there are really only two points open to discussion or debate one is the question of compensation which we can both dismiss because the New York bank dors not want to make this the means of adding to its net revenue at all We simply do not want to divide our own field of operations with the other eleven banks except upon terms which justify our doing so and the principal obligations which we eant to put upon the ther eleven banks is not to pay us profits but to assume their share of the responsibility and furnish their share of the capital required to make the account a success The other point is that of management and responsibility If each of the eleven banks joins in appointing one man as a manager in New York it necessarily must be oraanged tat he will receive his instructions and be subject to the supervision not of eleven different institutions but of some one of the tevlve institutions Stating the matter frankly I think you will agree with me that no one of the officere of the reserve banks outeide of yourself York bank are capable and possibly one or two in the New of conducting this account successfully and safely and looking at it as you may it will result under any plan in the New York bank undertaking the management and giving the necessary directions Your letter rather imelies that the reserve banks are going into the foreign exchange business in the same fashion that the National City Bark or the Guaranty Trust Company does a foreign exchange business 1 am sure that this will never be the A Kains Esq To Sept This account will be operated as stated in the last part of your report for the purpose of protecting the position of the country as a whole in the foreign exchanges To do it case successfully we must have united action We must avoid come peting in London and we must make vvery dollen employed in the account as effective as it can be by all operating together There is one point however that puzzles me a good deal and on which 1 would like to have youreaggestionst In case we accumulate a large portfolio of bills in eondon those bills must be reported either as individual inventments by each of the reserve bans according to such or else the allotments as are mode entire investment tarried say by the New York bank for the account of all twelve of the banke the interest of each being an undivided and unsegregated interest in all bills purchased In the former case if a lose occured it would hardly be fair to have it borne by the bank which had a specific bill that went to protest In the latter case losses would automatically divide themselves Mile I de not apprehend the possibility of any loss whatever on the whole I incline to the second plan of having individed interests in the account having the bills reported to Wanhington en blocque by New York end reeerve bank resort simply the amount of capital which they have contributed having each Federal Your influence in Bostin was effective in cryetallizthe opinione of not only the Governors but members of the 4To Sept A Kains vet Board and I am very anxious to have youroontinued cooperation to help put this plan through The matter has now been gener elly approved by the Reserve Board but requires consideration by some of the other authorities in Washington If we get that approval I am hoping to be able to start business this Fall How would that strike your Our Teutonic friends will not I believe be disposed to resist this plan and we should accumulate our exchanges at present rates rather than wait until costs of transpole tation insurance etc have returned to normal and the gold point begins to crawt back to I enjoy your letters very much but would still more enjoy a visit from you here when we could hrash this out By the time of tne next Conference in Washington I will be located in Denver and there will really be no ouse for your not stopping off on gour way through Another matter where I would like some advice from you is in locating a man who understands foreign exchange to this job in New York in case the plan is arranged tackle Do you know a man whom you Oen recommend as having all the necessary qualifications I am glad you know Jim Drake ner I have seen so much of him in He is a good old mari past years that I did not realize that there were any spots on the main brace that were capable of being spliced but if any one ceald you could With best regards Faithfully yours A Keine Esq Governor Federal Reserve San Francisco Cal http fraser stlouisfed org BS VCV Federal Reserve Bank of St Louis Bank find them I know Estes PArk Colo September 15th 1916 My dear Kains Where did you ever come across that letter of Lord Macauley s to Randall I mm particularly intereoled be cause somewhere recently I saw it quoted It was either in a book called The 3u1t of Incompetence or more likely in Bryoess American Commonwealth At any rata it looks as if Lord Wacauley fifty nine years ago had expressed in very positive fashion some views about a purely democratic form of government which views are just no gradually filtering into the heads of some of our peoole in the shape of doubts and Oisgivings You must be an omnivrous reader At least you and I know what it is as you express it to be in the bonds of serviin de under a democratic administration and under a democratic form of government Mat a mess this country would be in if now and then in a crisis some big man did not take it on himself to forget the constitution and the poor peoAtle which it is designed to protect and do a little protecting along lineo of his owns I recommend for your considoration the above mentioned book by Lord Bryce if it is the best criticism of our institutions that I have yet read you have not already read it 2 To Cept A Kains Esq Incidentally and not bearing at all on the above don t you think that float le a prutiy big chunk to take out of the reserve of the reerve banks That is the gigure reported as of September lot 1 had another brief epistle from you the other day which I will acnowledge longhand The best wish that i can send you is that you preserve your sense of humor democracy or no democracy Sincerly yours A Kains Esq iederR1 Reserve Bank San Fr ncisco Cal BS VCM li ITER OP LORD ACAULEY TO HON H S RANDALL OP NEV YORK London May Dear Sir You are surprised to learn that I have not a high opinion of Mr Jefferson and I am surprised at your surprise I an certain that I never wrote a line and that I never in parliament in conversation or even on the hustings a place where it is the fashion to court the populace uttered a word indicating the opinion that the supremo authority in a state ought to be intrusted to the majority of citizens told by the head in other words to the poorest and most ignorant part of society I have long been convinced that institutions purely democratic must sooner or later destroy liberty or civilisation or both In Europe where the population is dense the effect oi such institutions would be almost instantaneous at happened lately in France is an example In 1848 a pure democracy was established there During a Short time there was a strong reason to expect a general spoliation a national bankruptcy a now partition of the soil a maximum of prices a ruinous load of taxation laid on the rich for the purpose of supporting the poor in idleness Such a s jstem would in twenty years have made France as poor and as barbarous as the France of the Oarlovingians Ha ply the danger was averted and now there is a despotism a silent tribune an enslaved press liberty is gone but civilisation has been saved I have not the smallest doubt that if we had a purely democratic government here the effect would be the same Either the poor would plunder the rich and civilisation would perish or order and property would be saved by a strong military government and liberty would perish You may think that your country enjoys an exemption from these evils I will frankly wen to you that I am of a very different opinion Your fate i eelieve to be certain though it is deferred by a physical cause As long as you have a boundless extent of fertile and unoccupied land our labeling population will be far more at ease than the laboring population of the old erld and while that is the case the Jefferoonian policy may continue to exist without causing any fatal calamity Aut the time will come when hew ngland will be as thickly peopled as Old Jilngland Wares will be as low and will fluctuate as much with you as with us You will have your Manchesters and Birminghams Hundreds and thousands of artisans will assuredly be sometimes out of work Then your institutions will be fairly broue tt to the toot Distress everywhere makes the labourer mutinous and diseontentod and inclines him to listen with eagerness to a itators who tell him that it is a monstrous iniquity that one man should have a million while nother cannot get a full In bad years there is plenty of grumbling here aria sometimes a little rioting But it matters littic for here meal the sufferers are not the rulers The supreme power ic in the hands of a class numerous indeed but select of an educated 3 class of a class which is and knows itself to be deeply interested in the security of property and the maintenance of order Aceordi3l7ly the malcontents are firmly yet gently restrained The had time is got over without robbing the wealthy to relieve the indigent The Springs of national prosperity soon beein to flow aeain work is plentiful wages rise and all is tranquility and cheerfulness I have seen Pingland three or four times pass through such critical seasons as I have described Through such seasons the nited States will have to pass in the course of the next century if not of this How will you pass through them 1 heartily wish you a good deliverance But my reason and my wishes are at war and I cannot help foreboding the worst It is quite plain that your government will never be able to restrain a distressed and disnontented majority For with you the majority is the governent and has the rich who are always a minority absolutely at its mercy The day will come when in the State of New York a multitude of people none of whom has had more than half a breakfast or expects to have more than half a dinner will choose the legislature Is it possible to doubt what sort of legislature will be chosen On one side is a statesman pre ching patience respect for vested rights strict observance of public faith On the other is a demogague ranting about the tyranny of capitalists and usurers and asking why anybody should be permitted to drink champano and to ride in a carriage while thousands of 4 honest people are in want of necessaries Whic e of the two candidates is likely to be preferred by a workin man who hears his children cry for bread I seriously apprehend that you will in some such season of adversity as I have described do things which will prevent prosperity from returning that you will act like people in a year of scarcity devour all the seed COTT and thus make the next year a yen r not ofseareity but of absolute failure There will be I fear spoliation The spoliation will increase distress The distress will produce fresh spoliation There is nothie to stay you Your Constitution As I said before when society is all sail and no anchor has entered on this downward progress either civilisation or liberty mot perish Either some Caesar o ITapoloon will seize the reins of government with a stronf7 hand or your Republic will be as fearfully plundered and laid waste by barbarians in the twentieth century as the Roman Impiro was in the fifth with this difference that the Huns and Vandals who ravaged the Roman r mpire came from without and that your Tuns and Vandals will have been engendered within your country by your own institutions Thinking this of course I cannot reckon Jefferson among the benefactors of mankind Estes Park C010 September 21st 1916 Dear Keine I thoroughly understand the feeling which is inppired by the Federal Reserve Bark of New York in declining to make settlement through the Gold Eettlement Fund when thuir ba1ance6 due to the other reserve banks run o heavy Jul they res3ly do not scorn to understand the situation that arises in 1 ew York due if you please to the prrmtice of trtking New York exchange in such large volume for imrediete credit whon Nsw fork exchange is at a slight divcount So long as we im 0 about in circulation t2 cannot be immediately converted into gold except one is willing to give grave offence to the Secretary of the Treasury the YeOeral Asserve 8ank of New York ill experience difficolty at times in avoidine an undue acoumulaA on of Silver certifioAtes and United states notes As an illustration or a period commencing with too oettlemont of Augut 9th down to and includ ing September 14th the balances due to other reeve hanks have aggregated in detail as follows t709 730 August Oth Sept 16th d 30th 6th 12th Total To A Kains Esq Sept Confidentially the only way by which we have been able to get rid of all the silver certificates and U S notes paid into us at the Clearing Houee in settlement of these bel ancee tali by making private arrangements through J P Morgan Company through which we get the gold imported from Europe The rederal Leeerve Bank of ew York huu new veld ebout to other eederal reaerve bunks in eettlement of these exchenge balqnces for the greater part of which we have received silver and legal tenders at the Clearing houue and if it had not been for the huge importationu of gold fnmm Europe which enabled us to effee theoe swaps the Federal Ze3serve Bank of New York might to day neve been completely denuded of gold in its general reserve This is no theory which we facing but a real con dition and one whicn illustrates the weaknees of the system under weicn tee iederal Reverve Bank of Ner York is forced to re ceive payments frees its debtors in ei ver cortif cretes and C S notes ana is forced to make payment to its debtors the Federil reserve banks always in golds You may minder why it is that New York exchange lways runs against us and that we are constantly shipping through the Gold Fettlement Fund to other centers One reason is that the other root rye banks eeke Hew York exchange for imweeiete credit thereby creet ng a corsiuerabLe float end we a e not willing to add our oortribution to this doetructive policy be taking exchange A t To A Kains Esq Sept on other Federal reserve cities for immediate credit The float three weeks ago was week before last was tze 000 000 end this last week t Another reason why exchange is running against New York since the collection system was inaugurated and it might be expected to give us enough offset to wipe out these balancesis the attitude of the interior banks to their New York corres The big banks in other Federal reserve districte do not hesitate to duoip their New York items on to the Federl reserve banks of thoee districts but they seriously object to their New iork correspondents doing the same thing Coneequently the big New York banks that have all of these reserve accounts pondents from interior institutions in order to retain their connections are still sending their items direct and we do not get the offset to the items that the interior banks collect throueh their reserve banks 14r Calkins is doubtleee correct in rayirg that this difficulty will in a measure be corrected if the Federal Reeerve hank of Lew York places its facilities without limit at the dieposal of not only the reuerve banks but all the member banks of the country in making telegraphic transfers for nothing We could do all the business in the world on that basis but I think we have reached a point where we ought to connider theee operations in the handling not of a fee millions of dollars but hundreds of millions of dollars in fact 1 think the toteln are now into the To A Kleine Eq Sept thoueands of millions of dollars justify some charge or some compensation at any rate sufficient to pay for clerk hire As Mr COAkins says in his let er New York is the hub and when the axle stops it is inevitable that there should be some jolt in the machinery I like his oimile I do not know any wheel that will revolve on its hub without some grease and furthermore if it is not greased it will wear out he best way to handle this matter is retire the greenbacks and to have all silver certificates issued in the form of ono or two dollar bills Then they won t bother us If the reverend fathers at Washington won t do that then we might as well quit the Gold Eettlement e und and whenever we accumulate too much chicken feed in new York we will ship it to you at your wwn expense If that cannot be done without a howl then maybe Congrese will amend the 14w and permit the issue of U S notes and silver certificates in 10 000 or If R 000 pieces to order so that you fellows who build up balarees on us could be paid in kind and by the stems proccre we now employ in the Settlement Fund What we will net do in New York is what has been frequently suggeeted amd always diecouraged to cover the matter by teking exchange on the other reserve cities without limit Without time allowance without exchange and so debauch the whole system Won t you eel vother Calkins to think of eomo remedy for this puzzle which the holy fathers in Washington will consider and see if we cannot get it fixed up 5To A KainP Esq Sept you recall Treman s statement at the Boston meeting that between July 1915 and August 1916 credit balances of the New York Federal Reserve Bank at the New York Clearing House had aggregated t and the dehit balances at would you do in a case like this Also please tell Calkins that I am not laud but will be 41hty interested in any suggestion he an send Faithfully yours A Kaine Esq Gover nor Federal Reeerve Dank San Francieco Cal FIVVCM Estes Park Colo Septembr 21st 1916 My dear Kains Yours of the 16th enclosing Calkin s letter is just received About that epieole in English history the application is all right in this particular case if there hae beer ti ny slip in manners or methods but I had a feeling that on the whole whatever wooing has been done originated in New York and was rather more expensive to the wooer than the other way around ignoring Any unfortunate s14p that may have occurred as to the method by which this matter had been approached which you and 1 can both do I still think that your conclusions about this businese are bused upon some misconcetion of what our program contemplates You refer to profits of 1 64 which for a long time represented approximately the shave on exchange at New ork just now it is eomewhat higher as though the commission to be imposed by the Pew York bank would have to be paid out of this trifling exchange profit and that the business would not be a littie unlike Abraham Lincoln s steamboat with such a big whistle that the wheels stopped every time they blew at a landing in other wordsi it would be all commission and no division That certainly is not the case 2To A tains aq Sept If the Federal reserve banks either in New York or any where else go into the open mnrket to buy long bills such as you refer to and undoubtedly have in mind as the basis of this business we will incur the everlasting animosity of all our member banks which are in the foreign exchange bueiness and if we are successful in making the busineee profitable we will drive them out of business Their money at a minimum will cost them 2 less than ours does and how can they ever compete with us in buying such long bills PE copper and grain meat and gotten bills etc The Federel Reserve Act and the recent amendments to it were deeigned tc encourage national banks to extend tfteir field of operation into foreign countries How can they possibly k do it if the Federal reserve banks are eating into the profits of their foreign departments by throwing countless millions of their funds into competition in buying long bills that are really the basis of their present foreign departments What I had proposed or the New York Bank was simply to accumulate eterling by the purchase of demand exchange and cable transfers buying gradually whenever the market was weak and blow the present gold mport point say 4 76 and as sterling was accumulated invest it in London through the Bank of Ingland in long sterling bills selecting by preference those of American origin and endorsement rather than those which are purely elglishi not necesserily confining ourselves to American bills drawn on English ecceptors To Sept A Keine Esq Urder prevent condetions the investment of this money in London would realise an averaee of 54 to 51 4 discounted The commission to be charged ley the Federal Reserve Benk of New York I had proposed to be at the same rate ae that which applied to bills which we purchase in New York on which 2 discounted is erned Unier the arrangement as to commissions our charges would not increeee with the higher rte of discount on English belle ee against American so ae a matter of fact the reserve harks would be having these eereicee performed for them for the sere nompergation althoueh they enrned from the money employed twice as much Aiken wrote me free Boston indicating that he had it in mind the we would be shaving sixty fourths on this business and 1 suppose he got it from you becOUse Aiken has had no experience whatever in thet business If it ia this proposed eommiesion that worries the Scotchmen of 5Rn e Incise and Chicago and the thrifty New Eng lender of 3orton rhy lot me remind you that the question of fixing this commissiet Yee always been left to a committee of Governore an has ee t L64A fieed by the New York Federal Recerve Bank anyway So much for your letter in which I can see evidence of ocme slight change of heart The beet pert of your letter how ever is the postscript joy to seeing me soon You Bey you are 1ooking forward with Does that meun by ponsible chance you To A Keine Esq Sept may be able to get out here on your to the next Gonfere nQs I will be in Denver by that time and we can 119 1te some grand visits if you will carry out your plan top Or your wpy through if possible and we can go over the program together and do not be skimping on your time I am ttking the liberty of writing you separately about the Geld Settlement maAter referred to in Galkin s letter to New York Ny bent reEardn to you old man and many thanks for your letter Faithfully yours A Kains Esq Governor fecieral Reserve Bank San Francisco Cal BSPCM Montview Boulevard Denver Colorado October 20th 1916 Dear Kains By tl e time this letter roaches San It ancisco I may ever and I have h ve had the pleasure of seeing you a not written you since the party left believingat stop over on your way back I y 0 you at 4100 ontview Bouleva d short and unfortunately interru oiher vlditors gave Yo a dea d ou might warm welcome waits isit although much too y the arrival of those pleasure ond I am keen to have it reaeated I havej useen rea g over your letters of Septom Jalatter tat te 1 graphic transfers seems to be the ber 25th subject of root cor anondence between Calkins and Hendricks so I won t utt in They will doubtless work it out to your satisfaction About the foreign buciness however I though you would be interested in the enclosed copy of a letter from Mr Forgan There seems little proeoect of doing anything just now as the authorities at Waehington still ref rain from taking any action on our appliceticn Mlat would your idea be of the amount of Money that we could safely employ in London under the arrangement with which you are familiar How much for instance would San Fran cisco care to invest in that way ment on this I would be glad of your judge 2 To A Kin Oot sq Please give my regards to Ur Calkins and Vr Perrin You fellows on the Pacific Coast have such a keen gorse of humor that it mrly be although I douht it that some cf your friends in the East tLink it eafe to t Ace liberties with you Did you notice that the President has ccre to the conclusion Vial the naughty bankers of Now York re trying to get control of the Federal heeerve Syster real evidence aith best regards Sincerely A Kains Eeq Covernor Yederal R 8 ve lank San Francisco Cal BS VCM I i h v not yet seen any Denver Colorado October 30th 1916 Dear Kains Thank you for your letter of the 26h too accurate But why this SUmblepees bout the an N NN Your comment on Pr Forgan s letter to justify my replying Francisco Branch RE you call it 44at to Alan City it is as independent as an ank on the list the question of quan am glad to get yo tity I had in mind about t25 OOO total myself a shock in what you say You have giv about your own health and Kansas Won t y end me further particulars nary is in need of repairs Denver would Orlenditplaet to spend the Winter not at surprised at your turning down the What is the matter our ma oodness sake why put it on the ground agine your health anything hut above par of health There is a plan on foot to have all ether Governors ConVanderlip of but fo If they have one please cut out enough time to make me a Visit both ways 1 enclose a little picture of one of the Governors sent by Aiken which it seems to me is good enough to pass along to our Scandinavian friend at Minneapolis with instructions to add his initials and pass it on to the next one ference next month 2To A Kaine Esq Oct I await with anxiety some definite information about your health Faithfully yours A Kains Esq overnor Federal Reserve Bank San Francisco Cal BSPCM November 6th 1916 Dear letins While I was delighted to get your letter of the 1st I am a good deal distressed by the suggestion h t the doctors 1 have you in their clutches I am making such o progress myself that I am not able to extend tofoue sy pathy that arises from sharing he misery about e1th Be8N1 4that your trouble seems to be mental 4 1 well s physical and doubly hard to beer I I am glad to s hows s o that they have not cut you off from business activiti Treman writes 17 n made to persuade the tion business free of 8 erve bank sus e s some effort may be tc conduct the check collec charge t the member banks 1 rre spective of a pjAm4stion4f essiomy involved I think this would be a disast o s move eatablishing precedents which will for ever arise tother u and costing us so much of the advantage we have airead Take my advice follow the doctors orders and take good care of yourself Otherwise you may he paying the penalty that I am With warmest regards Faithfully A Kains Esq Governor Federal Reserve Bank San Francisco Cal BS VCM yours November 7th 1916 Dear Keine Yours of the 2nd arrived just after I wrote you yesterday and contains some little encouragement a o t your health but not as much as I had hoped When a man has tobacco tea coffee golf and most minded of what you said in rep t red London remark was that you would not ca Oa drink of whiskey now ad then abo4 ea I am r wiry as to what would haopen to our gold if the C don t care a rap things worth ortly willb having he is either in a bad way be dead or want to be ollille Qatke forego alcohol I think your as you would probably okea bit manage to sneak a a e coffee with my breakfast and II t play golf but that is no a a JuitaIaki care of yourself and you will be gree depriv Van all right i e Governor If you can h Itt eh sn onference is called for December 11th ay or two to spend with me here I shall be more than delighted Your information about taller is correct lie has been taken into the fold of the Roman Catholic Church and from what we know of his character and habits I should say he would make a very good Catholic I omitted yesterday to answer your inquiry about the government bonds Personally I would like to see a very large amount of the 2s withdrawn and converted and the long 3s sold 2 To Nov Mr Kains To do it comprehensively and at the same time to gvoid getting tied up with too many one year notes we should first have an arrangement with LicAdoo by which a larger percentage of the bonds could be converted into long 3s Why don t you suggest the subject Personally 1 would n t mind seeing all this for the program and give them a good lecture on at the next meeting the national bank notes passible retired just as promp as We have too much currency in the countfi n Best regards to you about your health and be sure old Don t b an know the final of the doctors Faithfully A Kains Esq Governor Fed ra4 Res40 ilerAi San Francizga BOCM couraged verdict November 14th 1915 Dear Kaina Again I seem to be guilty of us g loose language in my corres eondence with you It was my purpose to suggest that you were afflicted in the head but that certain mentAconflicts had arisen on ac t of deou found to be disturbnials in certain direction ing to Your mental aqui you coup here and make me a visit I will such comforts as are possible in this d hear that you have It re is a sho to u some trouble h your heart Lungs can be dealt with a man s heart owever is an stable affair and I presume neyAbmgtat treatmen ther more irksome than even ove all things take good care of I have wr uation wi len Treman urging teat he submit a set Governors in regard to our currency sita view to having them fully discussed and some recommendations made at the next meeting If you find it possible to attend and can save out a few days to spend with me here on the way I would like to go all over the questions with you and see if we can t agree on what kind of a program should be adopted To wrr Kains Nov California seems to have dumped Hughes into the ditch 1 cannot feel as badly about it as I would have had the Republican candidate been a different man What you say about the vote of the hyphenates probably applies t e whole country e and I have been have been having zero weather freezing my nose nights sleeping out doors Best regards and good wi Faithfully A Kains Esq Governor Federal Reser San irancisco4 Cal Bank BSPCM 10th ince dictating Take a go crack at tho at the WaP e above I have yours of the fellows on currency matters n m eV B S November 20th 1916 My letter about the California ou of the 15th ome crossed yours S unnec Further comment see ary I have passed your last con ributio to Wold You and he divide mor of the 3 e equitably and I am glad t can accumulate and perma Syst f gold either behind the note nently hold a vary large amo permitting the deposit issue or as a re f member bnk of all reerve o ever that any emergenc wou probably resu cold the the character of the note Has th Act extent that we do manage to which mig ht arise under conditions which t in ongress passing almost any amendment The gold under present e ask them If we can hang on off than if we hajd not collected it to it conditions is in however we ing upon the efforts of our through the amendment are better I am in favor of doing what we can to hang on to what we have and increasing it oc prepared in advance with gold to d hold 14 use whic until t to issue has been colle rather between you I don t believ curred to you mirth along friends in Wahington in it time rely to get e1 me know about the 71ashiht ton conference I am 2 To Mr ains Nov e seem to be losing gold to Japan to Argentine to Cuba and occasionally a little to Canada ments I All of thc se move the case England is eying for out of credits raised in New Yor Nothing can be done to stop these hipments as is quite possibly products you effort should be heard that Japan has put a prohibi not believe the mar I have on shipments of gold from J ners going to Japan under ment being only one way and we are going to disc that it With A Gove San ns Esq or Fed ral R cisco Ca his country age it llows are erve Bank Cawldian and I do confirm a freight ru rate Yith no ii insures too smart the movefor us me day n conference Let me hoping Unless think are normal except possibly to Canada I am June 26th 1916 Dear Mr Kains This letter will introduce to you my older son Benjamin Ftrong 3rd whom t have asked to call and see you on his way through an Fran cisco froq a vacation trip spent in California near Fanta Barbara Very tray your Archibald Kains sq Federal RErerve Bank San Francsico Cal VCL December 9th hank you for yours of the 5th and f about that letter to Piller what you say crack He is a the b st evidence of that is probably the fact tha humor at all in my letter Nor and saw no did it get u der his skin a bit Your state of discon I know all about it and ses my deepest sympathy tive It is too important eaking I hold your hand hington with the meeting a foreign connections you cannot do so ease don t answ I know are not up to sun imbi his and other letters from me for g health est re uch work and should be siting in the and a speedy recovery Faithfully yours A Kains Esq Governor Federal Reserve Rank San Francisco Cal question of our competent to discuss then any of them 13S VCN This is an W 16 S I k ssW71 UNION Form 2280 WESTERN UNION 3Hva 7 7A RECEIVER S No TTER BELVIDERE BROOKS VICE PRESIDENT NEWCOMB CARLTON PRESIDENT GEOr E W E ATKINS VICE PRESIDENT I CHECK TIME FILED SEND the following Night Letter subject to the terms on back hereof which are hereby agreed to December 11th 1916 Miss Sarah E MacDonald Care Federal Reserve Bank San Francisco Cal Am distressed to learn of Mr Kains illness Stop T indly express my sympathy to Mrs Eains and Kains if he is able to receive messages give my loveto Stop to his condition preciate your keeping me posted Benj Strong Charge Paid Benj Strong 4100 Montview Boulevard Will you Will ap December lath 1916 Dear Liss 11cDonald am very grateful indeed to you of the 9th and your telegram received for esterda our letter iving such good news of Lr Xains progress With this I am enclos eck for 15 an you will not mind executing ssion for me would like to send 4 sins that he would hope joy and leave it to your discretio taste just what to g them With many lass Sa Care Fe San BS VCM E LiacDonald al Reserve B sco Cal en id knolwedge of his a curd to go with 41 k Denver Colo December Miss S E McDonald New York City N Y Dear Miss McDonald I am most grateful to you for keeping me in armed of Mx tins ndition and deenly regret that his illnes oems to be so ous Someone must have referred to Washington as a latter from T here recently spoke o being rather serious but no one knows apparently the charco of the trouble Wont you give Mx ains m him that I am very greatly die 1 regards and tell of his illness Denver Colorado February Dear Kains The enclesed offers opportunity for a pun when sent to a pillar of the Church like your good self I hope you are getting along all right and axidelighted to know that yo going m so this letter is being addressed to the bank with tructions to f is now back home on the job and my y visit with h Jis a thing of rd Curtis the past The situation with Ge w 4y is to Frankly out in thiis par satisfactory f the world the great amount of interest is MD enthusiasm and no sition have war with Ge If we really rve System something to do and of course I U be A rburg s attitude and position Our amendments fear at this session of Congress endriCks has s a hornet s nest back home by concluding ar with the Express Companies and sundry Notaries Public to collect checks When we must non member banks ut the screws on way to do it in I guess the time has come our district and I know of no other opt through the postmasters which would be the height of folly I am glad to be able to balance a good report of your progress with an equally good one of my own My best as always A Kains Esq Fedar Reserve Bank San Francisco Calif Faithfully yours 4 Denver Colorado March Dear liains 21ease don t forget my initunction to the to answer ect that you are not my letters unless for recreation you fi To have such good word of your progress in your ov makes me rejoice and you stage of abasement uner you will be back at the bank and t I In order to have a conference with ey h e got quite a bank and per I have no as much more the center of things than little old New fine fellows and it did me good to ing smile s When ho witnessed the outward and visible feet of a year rest and 24 pounds him and among 1 1 1 matters we r Washingtm Today him with rLie have made a trip to Chicago chtthmen of that town I must say they looked well tions of discouraged Aiken and of course took the opportunity to look in visit v But don idio before you know it In the way of news si see net nd writing really are now going which occupied so much of my time la sonally it some diversion ethren in weight I had a bully discussed the trials and tribula ad nausiam to meet Fred Delano on the 12 20 train and keep for two days Incidentally 1 have purchased an outfit of golf clubs joined the Country Club here and propose shortly to be back on the turf The doctor has just left the house after a social call and informs me that he saes no reason thy June should not see me back in saddle but he me subdued the admits that he finds his job a hard one just now to keep C 2 To Mr March ins In conformity with my custom I give the following report on 11 7 low point was 129 lbs last night weight I sighed As this weight has been put on in a climate there pe e of middle age don t acquire weight readily and furthermore wit ut any stopping I shudder to think that will happen to me k to sea level Best regards to you old man and continued impr Fait A 4 aln s Federal Reserve Bank San Francisco Calif BS CC ent Denver Colorado itlarch Dear Keine I a delighted to learn by yours of the 26th that you are able to take Homeopathic doses of office work again don t overdo it You and I are living eyamples of the strenuous life but there is nothing to brag about in being alive if nothing goes with it really wonderful and I am Not to make you delighted and But your recovery has been relieved feel badly but really to encourage you 1 played golf all the morning with the professional out here It is really three years since I played and I was amazed to find that with a little assistance from him I could whack them out 250 yards almost every crack After a few more practice days which I propose to indulge in almost every day I am hoping to go around the course and will send you my card again not to make you feel badly but to cheer you up I have just had a visit from Delano after having made a short ran to Chicago Maere I met LeDougal Aiken and Broderick as well as the underlings in the bank It seems to be my mission in this job of ours to preach just the sort of stuff that you preached to me intelligent audience and if he had his way our work weld be immensely easier and the development would be A little later as soon as going to along bigger lines 1 believe the weather settles down your way I am treat myself to a Short visit with you but the doctor is still a bit cautious about my getting out sudden changes near the ocean Delano is a sympathetid and of this climate and subjecting myself to he is rather optimistic of the possibility 2 To Mr Ans L1arch of my going home in June With lots of good Ashes Faithfully yours A xely44 FedoTal Res II v 3 Bank San Francisco Calif BS CC Denver Colorado April Dear 2 aim Just a line to shake hands with you over our alliances I feel nretty happy about matters and only wish I were able to put in some licks alongside our good friends abroad If nossib e I will have a look at those flowers with you before going east and any way I deeply appreciate the sentiment Which led you to establish Benjamin s bed lily affectionate regards Faithfully yours A ains sq Federal Reserve Bank San Francisco Calif BS ICC Denver Colorado hay My dear Kains It was cheering to get your letters forwarded to me here from New York and the evidence in your firm and scholarly hand writing that you were your vigorous self once more I took a flyer to New York for a couple of weeks to help along on our Liberty Loan organization eaTe back here for another two weeks golf which has been largely defeated by bad weather and next Monday I am off again to New York for a fairly indefinite period disanoointed in not being able to visit you but let us postponed because of the war what better cause I am much consider it only of postponement could there be The Awe oorresnondeace explains itself We wanted to keep posted on what was doing in other districts and to exchange etc Faithfully yours A 4Q1Ap Esq Federal lieserve Bank San Francisco Cal BS CC information June 19th 1917 My dear rains Thank you for your favor of the 6th enclosing the two replies to your letler which you sent out in connection with the Liberty Loan They afforded considerable amusement to Curtis 1 nd myself Faithfully yours Archibald Xaine neg Federal Reserve sank San Francisco Cal June 28th 1917 dear rains Thank you for your favor of the 23rd regarding Mr Pierce I stp 11 be very glad to meet him while he is in New 7ork and give hin whatever information I can Zaithfully yours A Kains Esq Care Federal Leserve nank an 1 r ricieco 7al VC August 7th 1917 Dear Miss MacDonald Many thanks for your letter regarding the Canadian recruiting posters reply to which vas delayed by my absence during a vacation As you probably know Mr Strong went back to Denver for another month and has just returned to the city so Mr Kains has not been in evidence around the bank flow that Mr Strong is back we will probably have the pleasure of seeing him here occasionally and at the first opportunity I will take up with him the matter of the posters I can just imagine how you feel about Mr Kains leaving San Francisco and know there are a great many people who appreciate San Francisco s loss and new York s gain Cordially yours Secretary to Mr Strang Miss S B MacDonald Care Federal Reserve Bank San Francisco Cal V CY 5 Frr 11 January 3rd 1915 My dear Kains While absent from York 1 was still able to write letters to both the Metropolitan and the Down Town Association and trust that they may improve your pros pects for admission in both cases and not blast your hopes r f embership in tha netropolitan nub does not take so long but I think it is a sevsn year school with the Down Town Association and your nro oser and seconder onould put this matter on their ticklers as otherwise your name night come up for action and not be properly pushed With beet personal regards Faithfully yours AmericAv Foreign Barlsing 56 Tall Straet New erk City Palm Beach Fla February Dear Not all things move as rapidly in New York as they are sometiHes said to A notice has just been forwarded to me hero from the Down Torn Association saying that November 1915 proposals for membership are now being considered and asking whether you still desire to be considered when your name is rerchcd My best guess is that you ko longer have a very active interest in becoming a member but of course you might be back in the course of the next decade and it seems to take about that long However I have today written to the Trustees that I 1111 send definite word as soon as I hear from you Hou do you feel about it The best of good wishes to you Sincerely yours Mt Archibald C Kains Federal International Banking Corporation New Orleans La L1E3 Febru iy Dear italas I was just in receipt of your lavor of th 13h inc tanu iizuin first conzratulate y 0 upon iinally beidi able Lc retire 1 of ai J2 uod fortuae I edjoyed t ke you i1i not rcEL in candidate for r penTherellip in the Don ToAd Aseoci tion 1 shall do he 1 10ddfu1 6here In the mee ati I hope that t ye rs or yo ir retirement All be happy in evary 44 I know they will be for you lvi vo capacity to e et e lot out of life which is denied to many who have attached themselves too closely to bueinese cnd t1 Ay beet rv arde to you Si ucerely 1013ra 40 r1 11 Archibald Kai tie Esq Federal International New Orleans ES 1 8 nking Co king money LLIT T STRONG Jr RECEIVED PERSONAL FEDERAL RESERVE BANK OF SAN FRANCISCO PM FEDE2ALL RVEBA K OF NEW 10R K A KA I NS GOVERNOR 4th February 1915 14F 4 iy dear Governor Strong Your letter of the 30th ultimo is received together with a set of circular letters and forms issued by the Gold Committee containing harrowing details with 4 6 aakifereli diftgAWKINIVOraati VAirale the net result that as far as District No 12 is concerned there will be none of these cashiers cheques deposited in San Francisco Perhaps ten br a dozen of our banks are the only ones that have taken advantage of your goodness in cashing their cheques on us at par The indications are that we will soon be able to reduce largely if not entirely wipe out our debit balance with you Yours faithfully Benjamin Strong Jr Esq re Governor Federal Reserve Bank New York City FEDERAL RESERVE BANK OF SAN FRANCISCO AKAINsGovE 11th January 1916 4NC My dear Governor Strong Your letter of 3rd instant came duly to hand and I take due note of the particulars of the audit of the Gold Settlement Fund With regard to the comment of Mr Gamon I am in hearty agreement and I observe that the authori ties in Washington evidently recognize the force of what he has to say because they have enclosed cioher words to authenticate telegraphic orders from this Bank operating on the Gold Settlement Fund I understand also that the Federal Reserve Agent here has received another list of cipher words probably covering similar funds at his credit Yours faithfull Governor Benjamin Strong Jr Esq re Governor Federal Reserve Bank New York City J311 r G7 FEDERAL RESERVE SANK CO FS 9y At 61 A 7 ni o C1 o A e e Cst tL GrAA 0 cc C 01 Ve 44 P70 A Ak ss c W r a ft 4 fk A 4 c 7 C Q X http fraser stlouisfed org C c i Federal Reserve Bank of St Louis g r cVc Y r c nr Cr r t n Chicago 25th January 1916 My Dear Strong This is simply a line to wish you Ood speed and to thank you very much for permitting me to share in that joyous feast at H street Washington the other evening When you see Gamble in London get him if you have not otherwise arranged it to introduce you to the Bank of Scotland people as well as the Chartered Bk He will be delighted to be of any use I arrived here an hour ago and while awaiting my train to the wild west have been discussing matters generally with that solemn representative of North Britain McDougal With pll salutary wishes for yr self Yrs faithfully Archie Kains B Strong Esq N Y Kmad7 67 z AZd 26th January y Referring to our conversation this afternoon in my opinion a visitor to London seeking information on banking and exchange should not fail to call on the follow ing gentlemen who are the leaders in their profession in the City Lord Cunliffe Goveryier Bank of England Sir Edward Holden 132 rt London City Midland Bank Limited Sir Felix SchusteV Union of London Smith s Bank Limited Henry Bell Lloydt Bank Limited H H Hambling London South Western Bank Limited Lord Milner IOndon Jo5rt Stock Bank Limited R M Kindersey of Lazard Bros Company Christopher ugent of Union Discount Company H Wade of National Discount Company Limited R C Wyse of Guaranty Trust Company C Gamble and A R Phi pps of The Canadian Bank of Commerce One coutd go on adding to a list of this sort almost ad 1 infinitum as various phases of the subject present themselves to one s mina but the above should suffice to answer any enquiries along the lines of our discussion If information is desired on South American Indian and Far Eastern subjects other names occur If I can be of any service to your friend by way of intro C5 A Kains Esq 2 duction to any of the gentlemen mentioned above please command my services Hoping to see you again in a few weeks time I am Yours very truly Archibald Kains Esq c o H P Schell Esq The Canadian Bank of Commeree 16 Exchange Place New York FEDERAL RESERVE BANK OF SAN FRANCISCO A Kai 1qI NS GOVERNOR A t 0 71 e ger 9 o 4 0 1 f a IA C ne v L 76 r PV J2 C42 erv 0 of 0 o 41 etA erd P A e t2 C pr 9 h 71 14t 9 f t a 0 C7 4 sul rs co t 1Y hr CT 1 t e 4 ct rt P e rPf rf r rA f4I art slm avtrv Irfrt 1 A 4 6 1 r6 Pfrt Q 75 Ct rcz cd cm A r ct k 2 7 07U 19 t6 24th July 1916 My Dear Strong Even since hearing that you had been laid aside for repairs I have had a feeling of sorrow and sympathy which I should like to express but being an uncouth Scotch Savage cannot do it very well Mr Parrin gave me a kind message from you this morning with the information that you were recuperating in the Rockies and if I had any influence with the said Rockies they would do their work speedily and well I am keeping in a state of rude health by daily divorcing myself from 4 30 p m playing golf till 7 and the climbing round the hills of 7 course at the Presidio is making me as hard as nails thp L9ffice ga We are so far from the centre of things that we almost speak another language to that prevalent in New York but I feel sure that from the eleven other Governors of the Federal Reserve Banks there will arise a sigh of relief not to mention a note of praise and thanksgiving the day they hear that you are again doing business at the old stand and that it will not be long before they can gather together under your leadership 2ope you are able to get a little good fishing I would like to send McCloud River running off Mount Shasta where a few of us have a you up on club house and about 10 miles of river surrounded by mountains a fine place to recuperate The population is very sparse confined to Scotch Indians and their progeny The marriage ceremony is almost unknown on the McCloud and yet the half breeds are as kind considerate as good christians With all good wishes Yrs Arch Kains Benj Strong Esq Estes Park 2 ct Cc E i c e c o c r et AL 41 Wi h A F PERAL PESE RVE BANK OF SAN FRANCISCO k ww a vi cr AIN GOVERNOR 7tx y Aff i f P tt ED vv I c ko C r 6 icr c7 Cif2 c ovi 3 do fr Ic A te a d p Covv Et cc I c Di c E C scD tr k c i k n vo k ca t 4 it a I ck T CT 1 r f 1 k r1c s a A i n Cer CiPx 6 e t Q Q f4t A 7 c 4 C A cia t 4 4 c orcryin Q 01 cc 0 f o 4 1 al e c 7 s1 ceo 5 Cc rz 6 2 EC C cact e cr vt f c cg AA 7j cr t T 7 f r e CV o Ct cvC 9v CL 9 C 64 C 1 Zi t e c cc A C D CL OR C144A J 1 v t CC ot Izt t PI 14 C FEDERAL RESERVE SANK 4 OF SAN FRANCISCO cr Je fir LA c A r d 64 CC rlt e 0 ce k 4I C tr 0 e d 6 IF 2 Ccrt 2 t 17y a 4i c 7 f 4i rxf cr of C 45 c 7t9 7 GJ Q 0 c rA PS a6 04 CiL E e 0 frrTrAt kk ct y I 1 1 c C A Qc2 L Cecc 6 e dar t t t ay r cz ri 171 I 0 fvf A ce a r e of Cti or 10 t 6 2C 14 t c c irC9 C Q f I 0C vt Cf t it ant e CO 8th August 1916 My Dear Mr Strong has just arrived and I am glad the dissertation Yrs of 5th inst amused you inst Somebody has called a meeting of the Goys at Boston on 22nd Why Boston I suspect Mr Curtis I Qmmilli Nr Aiken that thought a meeting at this time premature in view of the short time the Collection System has been in force too much as if having planted some beans we wanted to dig them up to see if they had sprouted Our Collection arrangement is not much of a success as far as the amount or number of cheques handled by us is concerned Our member Banks in the City are only depositing with us their miscellaneous stuff upon expensive and difficult points being timorous as to depositing with us items drawn upon Banks in the principal towns of the district lest they should NaAttBk receives an lose their correspondents thus the Wells Fargo Nevada item from the East of say 50 000 on Seattle Na MBank Seattle Wh it could collect through us for 20 instead of which it sends it direct submits to a charge of 10d per hundred but some of these days the Seattle Bank may fail to keep its compensating balance and we will get the item The W F Nevada will use us and pull in its balances kept all over the country for exchange purposes and invest in commercial paper eligible for rediscount lovely picture We have been trying to make as many StateiBlia 45 as possible collect at par the items received from our members and by elffof coaxing cajoling even threatening a good many have assented but there are many stalwart protestants who cannot bqgot to see that it is a good thing for them to give up what they have felt was a legitimate profit and are not at present impressed with the quid pro quo these protestants are both within the charmed circle of the members and without amongest the bucCharlie McIntosh was telling me today of the immorality of our attempt caneers He says we are upon these state Banks I feel quite like an improper person the only F R Banks to exceed the instructions of the F R Board in this matter and that we have no business to do it but I told him that it was on a A of the member Banks that we did it so that they would not be forced to give par We may have to recede from our position which while state Banks could charge of course would not be a good thing as far as the efficiency of the System is concerned What do you think I am glad yr office is working would be delighted to have a few pearls of thought from you Whenever I can I haunt the Presidigl I played a game with Uncle John Perrin yesterday and made one hole in another in 37and a lot of 4s 5s but I regret to say that on one hole I got into 3 Bunkers all there were possibly to get into On Sunday the Bohemian Club has its low Jinks coupled with the cremation of Care which ceremony was creditably performed the mourners at the funeral making a brave effort to draw in their grief later in the evening I find I should not have said Sunday it was really Saturday evening that he ceremonies took place next Saturday the High Jinks and Grove play will I ll try and beguile a few minutes of yr time by giving you an account cted be of it later on 1 I hope that yr plan arranging for an account Pray pardon this with the old lady of Threadneedle Street will sqp be out so that I can take a hack at it With kindest regards Yrs faithfully Benj Strong Esq Estes Park Arch Kains OVERLAND LIMITED EXTRA FARE TRAIN eFlICAGO SAN FRANCISCO DAILY VIA Chicago and North Western Union Pacific Southern Pacific Skusust 18th4916 SeA 49 Benjamin Strong Jr Esq Estes Park Colorado Dear Mr Strong I am just on Lay way to Boston to attend a conference of the Governors of the Federal Reserve Banks on the 22ni and only wish that I had a couple of days at my disposal to ran down and see you Just before leaving San Francisco I had a letter from Mr Curtis who said not to forget that they were expecting a recommendation from me on the subject of foreign exchange This matter I understand you have taken up thoroughly with the Federal Reserve Board but in order to eserve continuity I have today written out my ideas which I will submit to the committee named by you to consider the matter and if they approve will present it to the conference With kindest regards I am Yours faithfully 0 9 r A c 6d C cAy 4 p t 7c Ci e cr 1 r C t l ts F C 01 C 4 REPORT OF THE COMMITTEE ON ZESTIONS SUBMITTED BY FEDERAL RESERVE BOARD TOUCHING FEIGN OPERATIONS It is evident that under subdivision E of Section 14 of the Federal Reserve Act Federal Reserve Banks have power with the consent of the Federal Reserve Board to enter the foreign exchange market in a very full degree provided an amendment to the act passes giving authority for dealings in ninety day or three month sightexchange exclusive of grace and your committee considers it prudent to prepare at once the machinery for the exertion of an influence favorable to this country in accelerating or retarding the ebb and flow of gold internationally Fur ther than this your committee does not consider it wise to go at least for the present being of the opinion that except for fiscal reasons the Federal reserve banks should not enter into active competition commercially with other banks whether members or non members As the benefit derivable from the exercise of this function is common to the commerce of the whole country it seems advisable that all of the Federal reserve banks should join in the undertaking which it is conceivable might sometimes have to be accomplished at a financial loss for the benefit of this country s trade Therefore partici pation in this activity should be shared proportionately based upon the capital and deposits of each Federal reserve bank and operations be undertaken through one agency for the Federal Reserve Banks collectively mittee does not think Your com well of the establishment at this time of foreign agencies belonging to the system but rather inclines to the belief that the object can more easily be attained by arrangements with the national banks of foreign countries which might in some cases be reciprocal under which purchases or sales for account of our system might be made while on the other hand throu gh our agency purchases or sales on account of these banks could be accomplished Consequently we would appear in the market generally speaking at all times and your committee would propose that the agency for our operations be situated in the Fedeml Reserve Bank of New York under the supervision of the Governor of that bank which latter would have so large a financial interest in our operations as well as the Federal Reserve Board The agent of the Federal reserve banks united for this purpose should of course be a foreign exchange expert and he should manage the affairs of of the bank his office quite independently of the affairs making an accounting and settlement of profits or losses at regular intervals There would of course be many details to be worked out but it is believed that before long a working arrangement might be had including the principal European countries as well as ultimately those of South America which would not only afford profitable employment of our funds but also wield a large influence in regulating the price of exchange and consequently the flow of gold Eti a Wu t A PA 916 trif art 3t3t ZJk e oPe Ct va 7 r 7 VT e IL p A 7T auP6 A 1 1 C Mirage A ct v t 9 9 at 311 a iris art le a pt r A gV c 1 aA e t d ckyL errt lrt t AI f A 2 ze er 62 cAT i 14 if LeA C1AA y of 49 Cc o c 9 TT Aft ailis an t of ie d L at 0u 1a t 196 t 4e gC c As C 1 1 L a WU V a Ca t e J AA sAk CZ e D Vt ccciL z a tAA e 44 77 o avvt p a A par a t 1 tit r d 0 X L CD ciAA kvt cu4 0 6 r P t C 1u kis 07 3 I a fhtlte r ihiiinj 41d go r do 2 A fr r Y c 19t7 tAr z1 0 e v 6L A 0 http fraser stlouisfed org 4f Federal Reserve Bank of St Louis PAo P A ttri 01 c t I i 4A j 7 zo A 0 M c 04c r1 h r vfrviJ e ca cil r 0 et S rt C5 cr ZA tkrvI P 60 ctp tA 7 yJy cuk v ow e2 Pct D Arco retr t 26 Angt 1916 My dear Mr Strong I arrived at this place from New York an hour or so ago and am much grieved that I cannot get a train for Seattle before 10 15 tomorrow morning hence I misspent a couple of years in this place I am inflicting a letter upon you and generally speaking have no great love for it but it is fairly cool just now and I am in a forgiving humour having been stewed boiled sizzled fried in Boston New York during the last four days The only redeeming vice the Boston meeting had was a dinner that Arken gave us at the Nahakt Club at which you may be sure you were well remembered Through Mr Curtis kind I W 4i was handed a copy of your lucubration in the matter of foreign exchange connections but had not had a chance of reading it over carefully before I vas summoned to the presence of their High Mightnesses Messrs Harding Delano and asked for my opinion as to these proposals to which in effect I said that I considered it expedient to get ready the machinery at once if possible but I was Somewhat doubtful as to the effect upon some of our etonic friends if we went much further at the moment though it is the prettiest thing of its kind I ever heard of and your reasoning is cogent The poison however is all in the tail where you propose that the FRBk of N Y shall act as a sort of syndicate manager the idea being also to tax each transaction which I do not consider the best policy I should be very glad to see you name the man and supervise him and to have you paid a good salary for such supervision but the Holy Federal Reserve System should act through its own hired representatives and pay no commissions specifically otherwise I am in absogodamlute agreement with what you have written would like to see you get the American equivalent of the order of St Michael George or la grand croix de la legion d honneur for bringing it about I do hope you are patiently abiding or if not that you will be given grace soon so to do Bide a wee and dima be weary is a pretty hard task I fancy for you but what s the world to a man when his wife s a widow I am confident that with care patience you ll be quite good enough for the road for many years to cone though like King Hekeziah you will have to go a little softly Little Seay I travelled together on Thursday evening from Boston to New York and talked a blue streak we reached the Biltnnre about midnight after a prowl up 5th avenue to try get cool when he said he could not get it out of his mind that it was Sunday This was owing to the 6cripture I had been quoting to him We lunched yesterday with Messrs Jay 11 emanshad a pleasent time of it It is a terrible thing to be alone in a great city I know crowds of people here but am afraid of stirring anythin7up as I have to lemielye on Little Olaf WolXd is expecting me to stay over at Minneapolis so soon day to play a game of golf with him but alas I shall be on my way through his I think there is some sort of understanding diocese to the west by that time in Nov after the elections If I go I ll take a that we meet at Wash couple of days of fi over to get some inspiration from you enroute if you I told them the other evening that you gave will allow me We 1 good night the accidental note or dash of colouirthat raised our song or picture out of the realm of mediocrity there were no contract minds AW annoy God give thee joy so deep that aechange can alter it orno fear For only so can life itself fulfill GOD give thee joy Fa Vobiscune Yours faithfully B Strong Esq Estes Park Archie Kains FEDERAL RESERVE BANK OF SAN FRANCISCO A KMNIS GOVERNIOR 6th Sept4beis916 My dear Strong Your letter of 2nd instant reached me yesterday just after my return from Seattle and the North Coast which I was visiting on my way home from Boston Our people in Seattle are clamorous for a branch there and I was urging them to hold their horses for a little while until we could swallow down our spittle You are quite correct in your diagnosis of the Boston meeting matters discussed there being for the most part of the class which should be disposed of by the head acolytes I could wish there was some central authority that could speak ex cathedra after mature consideration and have us all accommodate our local and petty feelings to the central utterance for the sake of uniformity I only wish I could get away for a little holiday this year but considering the fact that I was away so long on the South American trip not to mention these little Governors conferences I think it will be difficult for me to leave here at all But what I have said before regarding uniformity goes with regard to par collections With reference to your friend Jim Drake I remember sitting by his side in the Wee sma hours in front of the camp fire at the Jinks discussing everything from his early nautical career to the present attempt to par collections He is a very decent fellow and we have spliced the main brace together very satisfactorily As to the foreign arrangement Solomon says If you bray a fool in a mortar using the pestle yet his foolishness will not depart from him and our dear old friend Bill Shakespeare calls God to witness how hard it is for the truth to come out of a Jew Naturally I do not mention these little matters with any reference to you but just to shew that other people are tenacious in the same degree as the acclimated New Yorker is tenacious of his opinion and good naturedly and tolerantly contemptuoub perhaps that is too harsh a term of the opinion of the outsider For my part situated as we are I should prefer such an arrangement as I outlined with such modifications as seem necessary to having the Federal Reserve Bank of New York act for the whole Federal Reserve system We could have the whole thing centralized under your supervision and the cost of doing business reduced to a minimum I think as a matter of fact under the most favourable auspices that the agent who would be in your office would be practically under your control and might well represent the outside banks in I do not apprehend any serious buying warrants and acceptances trouble arising although naturally no doubt he would have to spend some of his time explaining matters to you and to the other governors as we have often seen done before The strongest objection to this system in my judgment lies in the fact that the law does not authorize the establishment of agencies of one reserve bank in the district of another but practically under your proposal you would be the agency of the other banks However I fancy if we desired to do so we could overcome this difficulty which would cover the great and fundamental difference between In the matter of the question of Tweddledum and Tweedledee compensation it seems to me that each bank yourself included should undertake to pay its pro rata of the expenses which latter Your would of course include all costs overhead and otherwise suggestion of a committee to supervise the business if the same is to be composed of our governors does not carry much weight In the first place they have troubles of their own on with me their hands and in the second place they would be about as useful as a sore thumb in mixing up in matters of which they know very little With regard to yourtobjection to having an agent in New York on the Question of responsibility I think we should all be glad to have you decide the policy and take the financial responsibility The liability of loss to be shared pro rata AnaEg you What is sauce for the goose is sauce for the gander would have such a large interest in the affairs of the foreign agency I am sure that the other Federal reserve banks would be only too glad to defer to you and have you act for them as well as for yourself compensating you therefor Now in relation to its suiting you infinitely better to have the Federal Reserve Bank of New York go it alone on all foreign business though as being a little cumbersome I should prefer the former plan it would appear to me that there should be no difficulty as to this only that the other Federal reserve It would mean that the banks should have the same privileges but this London bank would carry 12 accounts instead of one I am sure they would be glad to presents no great difficulties I know that in the case of the bank in which have the accounts I served for many years that the Bank of Scotland carried a great number of such accounts for instance accounts with our agencies at New York San Francisco and Portland as well as the branches at Montreal Toronto Hamilton London Ontario Winnipeg Vanouver and Victoria B C These accounts all received the same terms and there is no reason whatever why the Federal reserve banks could not arrange to keep accounts in a similar way which would answer I will enlarge on this if you like later many of your objections one 3 All the influence I had was as strongly exercised as possible to favour the completion of the arrangement made by you as promptly as possible but I was timorous as to the effect the bruitinp abroad of the knowledge that such an arrangement had been made might have among our pro German fellow countryI remember being asked what chance in my opinion there men would be for a German army reaching England and capturing the capital My reply being that my opinion on the subject was probably not worth much because for my own part I would rather be dead than see such a thing come about but th was no probability of such a catasthrope happening I shall certainly make every possible effort to spend a few days with you on my way to the next meeting I am only sorry that I did not consider the possibility of doing so on this latest occasion before it was too late With kindest regards Yours faithfully Benjamin Strong Jr Esq re Estes Park Colorado cc rzt FEDERAL RESERVE 13 NK OF SAN FRANCISCO KAi NS GOVERNOR 0 c t e you C L cfrrvt fc Q5 COL vt fr l c 7 e I s2 L6Ly A Pt WV 7 e P14 C eYq7 cryier Crul I y el Kg 1 ttA e Cf LC C trEA 4 A IL rr r Sept 11th 1916 My Dear Strong Just by way of an endeavors to entice you away from your ireams of evolving the safest and best plan for the painless robbing of the public and to lead you to the consideration of higher things I am enclosing a copy of a letter by Lord Macaulay to a friend living in New York in 1857 How can a man be other than an oligarch if possible unless he can awing things alone Yours in bonds of servitude Arch Kaines B Strong Esq f FEDERAL RESERVE BANK OF SAN FRANCISCO 419 4 A KA I NS GOVERNOR 16th September 1916 dr49 6 My dear Strong Your letter of 11th instant came to hand last night and I have attentively noted its contents Of course there is really no disagreement between us at all as to the desirability of operating the account as one and not as twelve My observation regarding the twelve or more accounts that the Canadian Bank of Commerce kept with the Bank of Scotland was only called for to shew that it was quite possible to deal in that way and desirable also in case we could not do any better but nevertheless one account is the most desirable way to have the business handled My position with reference to your proposal is simply like that of the old Earl of Huntly when the English people desired to make a match for their young King Edward VI with I ary of Scotland and sent an army up there to dictate terms he disliked not the match but only the manner of the wooing Of course I know that New York is the only large open market for exchange where transactions can be cleared but having spent five years in the South buying cotton bills in five different States I realize the possibility of accumulating immense quantities of exchange which need never see New York and the same is true with regard to the grain bills originating North and West of Chicago and But you look upon these transactions in many other places as naturally belonging to your field of operations and I do not desire to object although strictly speaking they only belong to you in respect of the function of New York as a clearing house for foreign exchange As I stated before I think it is of extreme importance that our transactions should not be individually and I speak with some little experience having been taxed sent down as a stranger to New Orleans and hooked up with a respectable old broker there who knew all the ropes and whose This was in the dark charge for intervention was 1 32 of 1 70 ages and before 1 64 was a desirable commission to chase the result being that I was only able to make about 5000 over expenses whereas later on by doing business without this charge I was able to increase the amounts handled as to shew a profit of something like eight times that amount next season With regard to the joint agency which I re 2 commend I realize that the consummation of it calls for the exercise of magnanimity on your part but am confident that it is the most scientific economical and safe way to handle Naturally you would establish the policy and whoever it you had to manage the purchases and sales would also be one for whose mistakes we would be jointly responsible Personally I would consider the risk of loss mighty small but it would be the same under a joint agency as under the sole management of the Federal Reserve Bank of New York and under your proposal of taxing individual transactions with regard to business of which you would have a monopoly as far as the Federal Reserve System would be concerned it would only seem reasonable for you to asmime all the risk as you would probably expect your European But the joint agency under your control correspondent to do could well afford as I have said to pay all the costs overhead and otherwise and apportion such cost pro rata and you would have the satisfaction of being primus inter 121 y 21 in doing a beneficial work in a manner that could not be unfavourably criticised with a contented body of associates for the benefit in proper proportion of our banking system as a whole Any other course is I think under our circumstances unsound but rather than have compretition among twelve powerful banks and economic waste I would personally be inclined not to gag at your iniquitous proposal as being the next best thing Yours faithfully A Benjamin Strong Jr EsqTre Estes Park Colorado c4 z Ck ev 46 cc y cr 1 0 Ct ylLe r L cc f6Lk r r o rA rr 4 1 ro FEDERAL RESERVE BANK OF SAN FRANCISCO 4 A RAINS GOVERNOR September Dear Strong Your letters of the 21st instant reached me in due course and found me sitting like a sparrow over a game of golf alone on a house top and meditating I say alone because my acolytes Calkins and Bordwell are away the former in Kansas City where he has gone to help swell the noble representation you thought the Federal Reserve Banks should have on the occasion of the meeting and the latter somewhere in Oregon on a vacation But why should I say I am alone when I have beside me or rather in they next room the comforting presence of dear old Uncle John who I suspect has made enough money in the long sustained bull market in New York to enable him to buy another thick coating as a defense against assaults upon what was already an almost impregnable citadel Be this as it may I was truly concerned exposition of the ravages made by that reprobate old at the horrible Gold Settlement Fund upon the peace and happiness not to say potentiality of the eldest daughter of the church I mean Federal Reserve System You ll excuse i my French I ve been so much abroad myself up principally to prayer oblivious to the consideration and moreover having given and good works of late I had become that our dearly beloved children in the faith the member banks have not yet appreciated the necessity of carrying their end of the log which is indeed a vary saddening consideration 2is as The way this works as between New York and San Francisco follows gets gold on balances for all items San Francisco to wit received from the other Federal Reserve Banks but loses that gold to with balances which they fill not member banks when they draw against the items on the East which we could naturally expect them to give us but with their drafts on New York and elsewhere which they sell us on the terms fixed by us in our circular letter at present a premium of 150 per thousand for telegraphic and 24 per thousand discount for mail Naturally they prefer to sell us mail transfers as they get interest on their balances at 2 and New York is five days off and we coterie oaribus would rather sell them mail transfers because of course as far as we are concerned under the present circumstances and there is no difference between telegraphic mail except that we would lave to pay a higher price for the former to get the same effect as we would from a purchase of the latter If as we have endeavored to suggest see enclosed letters office would allow us to deal in telegraphic would probably reduce our rates to regular as long as we did not drawn in lieu of the same the service chargts 40 your in the time honored way we discount for wire and say 514 for get the covering items in place of the exchange We would if we got the latter of course get so that the effect on us would be the same except that we would be doing more work but the effect on you would be that you would get gold for the telegraphic as we would purchase telegraphic transfers under a stipulation to that effect or buy their mail transfers at a still greater downward spread our only effective weapon to preserve our gold being by regulatioh of the rates I wish I could solve the riddle satisfactorily but under the rules as they now stand it would take a syndicate of wise men their exclusive attention giving the matter If it could not then be satisfactorily solved then change the rules Pardon this somewhat hasty screed things to emanate but we are expecting great from the rookery in Estes Park over which you at the present time I think I said before that I am hoping to coma along your way during the first week of October which is now almost leave the moment Calkins returns Yours faithfully a 77i t Al t 7 Benjamin Strong Jr Esqlre Estes Park Colorado upon us and I will 3as they now stand it would take a syndicate of wise men their exclusive attention giving the matter If it could not then be satisfactorily solved then change the rules Pardon this somewhat hasty screed things to emanate from the rookery in Estes Park but we are expecting great over which you are brooding at the present time I think I said before that I am hoping to coma along your way during the first week of October which is now almost upon us and I will leave the moment Calkins returns Yours faithfully 17 Benjamin Strong Jr Esqlre Estes Park Colorado 476 FEDERAL RESERVE BANK OF SAN FRANCISCO 4 A KAINS GOVEF r1OR 25th September 1916 Dear Strong Your letter of 21st instant twitting on exchange matters is at hand and I have been trying to get hold of my misconception of what your programme contemplates You say yourself that you do not wish to make any profit upon this business beyond the 40 or more to which your proportion of the investment would entitle you now that being the case of course the expense of the business should be paid for and should be paid for by each of us in proper proportion The Federal Reserve Bank of New York in the imposition of a charge on the individual transactions would be charging all the Federal reserve banks including itself a fixed rate which in all probability would be either too high or too low if the morst efficient method at the lowest cost is the desideratum I never had an idea that the Federal reserve banks should go into active competition with their members but I only mentioned the possibilities open to Federal reserve banks under the Act Your proposition for the New York bank is exactly what I should propose for all the Federal reserve banks of the system as a joint account proposition You admit that in the event of loss you would expect this Bank or any other Federal reserve bank to assume its proportion of loss and therefore I should say that makes it practically a joint account proposition in which the Federal Reserve Bank of New York should not add a super tax to the business I think with regard to selecting by preference bills of American origin that your proposed correspondent in London if it were inclined to guarantee payment could be trusted to select bills that would be paid on due date should not care whether they were purely of English or partly American or partly Russian or other origin With reference to the amount the investment of this money would realize I have a lively recollection of a very extended period when money in London was less than 1 However the whole matter is a question of the principle which should be applied in handling this business I do not think FEDERAL RESERVE BANK OF SAN FRANCISCO A KA I NS GOVERNOR 25th September 1916 Dear Strong e 4 Your letter of 21st instant twitting on exchange matters is at hand and I have been trying to get hold of my misconception of what your programme contemplates You say yourself that you do not wish to make any profit upon this business beyond the 40 or more to which your proportion of the investment would entitle you now that being the case of course the expense of the business should be paid for and should be paid for by each of us in proper proportion The Federal Reserve Bank of New York in the imposition of a charge on the individual transactions would be charging all the Federal reserve banks including itself a fixed rate which in all probability would be either too high or too low if the most efficient method at the lowest cost is the desideratum I never had an idea that the Federal reserve banks should go into active competition with their members but I only mentioned the possibilities open to Federal reserve banks under the Act Your proposition for the New York bank is exactly what 1 should propose for all the Federal reserve banks of the system as a joint account proposition You admit that in the event of loss you would expect this Bank or any other Federal reserve bank to assume its proportion of loss and therefore I should say that makes it practically a joint account proposition in which the Federal Reserve Bank of New York should not add a super tax to the business I think with regard to selecting by preference bills of American origin that your proposed correspondent in London if it were inclined to guarantee payment could be trusted to select bills that would be paid on due date should not care whether they were purely of English or partly American or partly Russian or other origin With reference to the amount the investment this money would realize I have a lively recollection of a very extended period when money in London was less thAn However the whole matter is a question of the principle which should be applied in handling this business I do not think but it is quite possible Aiken got anything from me because we did have a conversation regarding the business generally I am somewhat amused at being considered a Scotchman but have been doing the best I could at it under the handicap of having a father and mother born in Canada between eighty and ninety years ago a paternal grandfather who was a bow legged English officer in the Royal Navy and a maternal grandfather who was a fox hunting Irish The Scotch comes in through the two grandmothers squire and evidently seems to have been the most persistent element I think that the thrifty New Englander you refer to from Boston is more Scotch than I am As a matter of fact I am not worried at all about it is solely the principle of the thing the commission and as I stated before the next best thing is to work along the lines of your plan beyond registering my opinion I would fall into line like a good dog lie down roll over Because what we should have above everything and play dead 1 is cooperation With regard to my movements as I have intimated I expect to leave here early in October say about next Tuesday or Wednesday if my plaris carry and will be able to be in Denver a couple of days later when I shall not be long hunting you up and having what you Yankees call a good visit together With kindest regards Yours faithfully Benjamin Strong Jr EsqTre Estes Park Colorado FEDERAL RESERVE BANK OF SAN F erICISCO A KAINS GOVERNOR 26th October 1916 Dear Strong I found your letter of October 20th when I arrived here on lionday and was very glad indeed to get it To say that I enjoyed being with you in Denver puts it very mildly indeed it was a great delight to me to see you looking so well and so courageous I carefully note what Father Forgan has to say on the subject of foreign exchange I do not think he ever did very much of a foreign exchange business but och man he s verra soond if he s no deep It is too bad that their high mightinesses in Washington take no note of your humble a plication but constituted as they are you could not reasOnably expect them to do so at the moment Your San Francisco branch would be glad to invest a million or two any old time in the way suggested when conditions are right as they are now and I should think the system could readily put out thirty million and upwards with the Old Lady of Threadneedle Street I had a most interesting and enjoyable trip as far as Omaha with Hessrs Vanderlip and Trumbull the latter of whom was a perfect joy as to the number of funny stories he told Did he tell you the butterine story If not here goes As far as T recollect he mentioned that he happened to be crossing the ocean with the late Philip D Armour after the latter had been victorious in his fight with Jbe Leiter and when the packing houses were perfectly working to full capacity etc etc He remarked to Hr Armour as they were taking their morning constitutional on deck I suppose 21x Armour now that everything has turned out so successully for you that you are satiated not to say cloyed with success and are probably getting indifferent row for curiosity I should like to know whether there is any one thing Mich you do that gives you more pleasure than the rest Yes said 1r Armour making butterine gives me the most pleasure Why asked Trumbull ecause it is the only way I can get the hog down the throat of these damn Jews I yonder if Warburg would appreciate this I rather think he would but I should not like to write it to him I should not mind telling it to him on a proper occasion because while he is a perfectly good Jew I have no doubt he is also a perfectly good fellow Having returned after a more or less strenuous I ha l a fainting trip I am not anxious for any more travel fit in New York and felt for a while like an automobile that was missing its stroke and even now I feel like the breaking up of a hard winter I have not however taken down the sign as I may be preserved for some good purpose yet Heaven only knows I received a most considerate not to say flattering letter from Er Vanderlip making me an offer with It was a great regard to which I believe you are familiar temptation as the work would be in my line and the kind I like but on my return here I had a thorough physical examination made of myself which is not over yet but larP ely as a result thereof I am firmly convinced of the necessity of lying low here for a while if I expect to decorate this mundane sphere for any great length of time Besides I had not squared matters with my wife and I find so many ties The about here that it is almost impossible to shake off salary he offered me 025 000 was tot so temptinr as the work But whether cheap Perhaps he thought I was a cheap skate or skate I won t be trotting in his race course but will probably continue as far as I can be useful to trot along quietly in the rederal 7eserve paddock munching a few oats now and then and oing along like good 7ing Hezekiah after he had received his warning although he had fifteen years of life vouchsafed to him and I do not expect quite so many but if some of the years can be useful I will be very glad The only consideration that would make another meeting of the Governors attractive to me would be the pleasure I would have in starting a day or two earlier and dropping dorm to see you either going or coming Ii kindest regards Yours faithfully 0 AINC en in Strong Jr Esq re Estes Park Colorado Q 0 14t S27 er icrThr alj 0 frtri 6rv f d al hiL teC et C ae 1 2t t eti 17 Ovvl 1 1 C f L cz cfrLAr 4A S of y 1 4l hp cc c iAz C 51 1 e ti a 4 fra e er vt4 C ill v vt or a i I t b A ar e t tpuL A clx e E s a 2 SZ Cr 1 e viz c y A c etri 7 kw eit c 5 P I rtA Q IAA C 0 K 1 Le L Ert 4ZOITA t fr e ei i ii e P ovv GrA a t it fv tz Ct or r 97 c d 1c P f f c 0 e N t it or r Gv ct V G A 442 cr 7A r f vt 7 o fiet7 C I 1 tA IA tr As v cc t c te IA 77 c 4 fru a t s CC ECt A 61T A Ccr r 1 x e tpa k rx ai 6r A 7 Vt t A4 0 co n a t 09 V 4 9 etr 0Y7 f 4 A r 7 1 Ft I f Cbvt CriZ CL CLL Cr r ut p http fraser stlouisfed org t Federal Reserve Bank of St Louis t cr t U hI s tt e h s a 1 4 1 e A 4 i Cfr e L A t7 0 a a r e F tan t cf c I I P e e c JVO A 7e C11 1 C9 1st Nov 1916 My Dear Strong Today being All Souls Day my mind naturally turns to a strong soul in durance 11 11e though mile high and I hope that before many months roll over us that the body ghWasing the soul will have become strong enough to carry round its impatient tenant without inconvinience There is very little in the way of news We are fighting away on the collection problem and losing about 2 000 per month in costspaid to express companies for collection of items on State Banks in this district especially in I expect we will be opening the State of Washington but will just fight along an office in Seattle before long as a starter which will cure some of Af14 vils bonds and Do you think we are aq ve enough in redeeming or taking over the converting them into 3 for disposal to th9 public It seems to me that we could ke much more rapid 05ess without d4ratning ourselies The doctors So that shows to what a low estate I whiskey golf drink have dam them play They don t look with favor with my motplte use of tea and coffee Howfallen National Banlzin Fresno has been ever I live in hope of better times One of brought out by the Bank of Italy a young vigorous institution with more sail than ballast which is under state laws and is doing business with many branches All same Cosh exchange New York The highcontracting parties have appointed me appraise of the value of the expiring National Bank and I am going down to attend the wake on Friday This will be the first dry Ilake I ever attended I pray I may escape all untoward accidents Uncle Johnigetting restless I think he wants to go to East before long to tell the Board a Pew things which regard to running Federal Reserve Banks The elections are of course hampering proceeding at present If Wilson has the ghost of a chance it will be due to racial considerations The hyphen dies out slowly of course a blown in the bottle A New England like you also no4 appreciate this concideration like the branciOs of a my apologies for inflicting all this trash upon you coupled with later vintage the assurance of my most distinguished considerations 20 Your friend Archie Kaines ct a e2 tri uk9 jrq44 FEDERAL RESERVE BANK OF SAN FRANC SCO SV11 OVE RHO R 4 7 Car 0 eit Iffrt T f u2 1Le G S 7J t 4 et 7 k V Oc y1 74 vt l i4J e P IA 3T Lz tr 11 y ftte 6AA c e cd vrr Y A KSivrx Gfrt cc cuAJL r Q1 i4 1 Ift CDU Cr rC tAn gr 3 II LJ Ct 9 Q eL 1 Gfrve4 friA e 3 w1A P e 114 v1 Le 4 ty Gfrt TYVk PV RAT cl CA f 11 P le r vt i 7 ca A 0 ad 9A 9 c t e lit 5 7 A 11 C NW I 11 o r t rerc e AR 6A f 8 Ar ct Ctr rt 0 4 frt i ef w tef fr a 4 y 0 LI K L 4 t ny k C CV fi t 4 1 e Ct 9 i 14 Cr c 1 t t4 1 L Vt ct C 2 a 4 CP Q n Ae v crr t2 0 tf e 1 r a ccr 4 1 A 1 2nd Nov C 1916 Dear Strong Your note of 30th t gte has just reached me There was no humility intended in my inadvertently referring to this office as a Branch due possibly to my long association with a proper banking system I have no words to express my gratification that you should class us with those bright and shinning marks Kansas City and Atlanta With regard to my I hope temporary indisposition the doctors tell I have to be very careful inme my heart is enlarged and slightly dislocated deed in my actions and go about very quietly Abstaining absolutely from anything like whiskey beer wine etc also tobacco tea and coffee The rest my machinery is in such good order that I am relying upon the heart getting ashamed of itself and falleInto line again In this connection I am reminded of interesting ditty entiled He never blames the booze whatever that may mean Muchas gracias for your kind invitation to look in upon you which I would fain do I trust that the meeting may be postponed a bit say till about 7 or 10th December as at the moment I would look with dread upon the prospects of crossing the continent I note with much interest the picture of our friend Miller at the Caw when in Boston someone said that 1w had joined the Roman Catholic Church being He certainly had titzlook of those brethren which a convert on possibly a pervert to the practiced eye is almost inmistakeable I will as you indicate forward this picture to Little Olaf at Minneapolis with instructions to read mark learn initial and pass on to MacDougal When I get through with these dear doctors I ll let you know what they think hoping I may me given grace to fool them with all kind salutary sentiments Believe me Your humble obedient servant who kisses your hands A Kaines B Strong Esq Denver Colorado r t v A fi C4 s BiPsik4 4 FEDERAL RESERVE A Ji f OF SAN FRANCISCO Q7 Iy 4 V QY A KAI NS GOVERNOR f A 1 RA A C7 7A5z7 17 DI Q 0 74 u 6 cL2 cwv Ctv1 6 r L 1 A5 1 1 1 Of cp s aryl r r gS 7 A r ca L 4 O Cc 4A C s r9 css Clt C 04 4 e Of v rt c VA 4 0 4 C a k af r eu 7 C r e A 7r si c K 7 6 e a 7 C1 A R9 c 4f C 9 Yt ct q 6 t e kr trTA C f 90 Ctl C 0 GYL 4 1 tiL67 op 9 I fr irmr 114 r t vt CiAP tQS C2C Alf p f C s22AA e I 1 9 e r e A I Z 0 A cf e 22 co 9 Jo mi 4 Lx 0 C t cl A ie i i I r i r Tl C P c c t a 0 FEDERAL RESERVE OF SAN FRANCISCO A RAI NS aoveRrvc d r A cr 1 7 c k9 4 a t q CC t A cr c Ai ar rbKL A tr r cr 7 1 II af C frv t rtr n cy 1 C7l CAF 1 L q um 1 rt 7U2 r if 0 C e o t el vvt G 6t 44 dA aA6 r d r A A e Lz x7 IN g9 t ec 0 C t c I C e C A e Q at e a r4s Lo r 4 0i Prl r C a 9 r Y 6 r rAl P Lc ca k rt o F eo 0 z g c c Y c f L A a k co g 1 A Qi s Z7 cyc 4 tin IA Z Gt i 1 c a It J2 ti Q ilit Cr j L if Nov 9th My Dear Strong Yours of 6th t 1 4 eris just at hand and I am glad to have it even at the expense of knowing that in addition to other troubles I may in judgment be afflicted with wheels in the head Faz4b4it from me to attempt to I exposed myself however deny that this is the truth but I am wondering just how think the head will folis my old pump will get into its regular habit again low suit With regard to what15 eman says in respect of the effort to persuade F R Bks to conduct cheque collections free of charge I would say that the chap If we had practically all who desires this effort made is damnably premature the Commercial Banks National State and Trust Cos in our membership and to a certain extent under our thumb and were making plenty of money legitimately I would rather spend some of it for the benefit of the said members in the way of lightening their collection charges then turn it in to Uncle Sam but we are no that length yet as a Scoiaman might say and it will be time enough to bid the devil good morning when we meet him Instead of fishing themselves about the mint anise and cummin they should leave these minor matters to fryin their own fat for a while while the weightiermatters of the law receive attention such as the making of F R notes eligible at reserve financing the green backs etc fixing it so that we can collect the dispersed gold However when this political I had a telegram from turmoil is over I hope something adequate will be done It looks N Y this a m enquiring suspicioubly as to the result in California like Wilson at the moment much to everyones surprise because this state properly Johnson has hornswaggled Nr Airaa handled is rock ribbext Republican but the community and while nominally for Hughes has not supported the latter with fervency enough to induce the belief that he was really for him and as he has a wonderful organization for a young state I am inclined to think some trading was done Johnson for Hugi4s just as Warren Miller was traded for Ben Harrison and fell outside the breastworks except thadi5it is not the Senator but the Presidential candidate that is now doing the falling Then again the British vote is stronger here than any of the other hyphenates and when it was seen that the German vote was going solidly for Hughes the natural thing happened Then again I think our Holy Father the Pope in some way gave his faithful children to understand that while both candidates were heretics Hughes was the preferred heretic for various reasons while I may communicate to you some day if I did here you would be confirmed in your belieki that the lunatic asylum was my proper homicile and therefore when our 11 ristian science friend of which Southern California is full realized this they also did the natural thing However politics is a queer bird you never can tell by the length of a toads tail how far he can Commending all this nonsense to your astute mind with kindest regards jump a Believe me Yours in virtue mercy charity Benj Strong Esq Denver Archie Kains FEDERAL RESERVE BANK OF SAN FRANCISCO November 10 A KAM GOVERNOR 1916 Dear Strong Your letter of 7th instant is just to hand I am getting along as well as I could hope I suppose I ought to be locked up somewhere to prevent exertion but I really would pine away and die if I did not engage in a certain amount of activity Just now we have had a vary exciting time over politics and my most intimate friend here being the representative the Democratic party I have had a view of the National Committee of of the inside of politics which I have found very interesting I enclose cards of a couple of temptations which I will have to forego that is as far as making any great effort is concerned I wish to God we could get an arrangement with McAdoo larger percentage of the bonds could be converted into long 3 s whereby a and at your suggestion I will do the bast I can along that line The American Bankers Association seems to have taken it upon itself to work out a clearing and collection plan nation wide in its scope and fair and equitable to all banks and to the business interests which means I assume that the country banks are desirous of continuing them profitable handling of check collections their old unscientific but to They have written me in common with all the other officials of the Federal Reserve Banks for opinions and statistics but Aiken has forestalled the likelihood of ans ers being made by writing us giving it as his opinion that no answer should be made the conference of Governors sound enough until has a chance to consider the matter which is 2 I am not at all discouraged 4 play the as regards my health as I intend to game properly and if dissolution should coma along suddenly I would be interested in experiencing the various phases I had a nice note from Wold this morning anticipating a meeting in December With kindest regards Yours faithfully Benjamin Strong Jr Esq 4100 Montview Boulevard Colorado Denver pleasant cr16 FEDERAL RESERVE BANK OF SAN FRANCISCO GtA e c A KAINS GOVERNOR cr C v f A 0 14T 6z C7rt 7 c J C Q Ar C r r Ovt 1 of pt I 74 e Gvvi E 6 e FEDERAL RESERVE BANK Nov la OF SAN FRANCtSCO A KAINS GOVERNOR A k r 0 eiy to ir 6 1c5 n 1A Ja cr pt s N fr rX Cf cr t cr A 9 cz Vf Nr JL Clt A ri I r u vt ys op G s http fraser stlouisfed org re Federal Reserve Bank of St Louis e r A J o CV Icy o t f tt 1 j 9 4 v fi V E CO A c g r rt 7 X7c cs4 R 2 a tzcZ 1te t7 7of c e 3 C Q CAJ CD A ll v Ltr 1 12 rrid y 7 r c z c c Ct 0 14 e tit9 A ir c e d r r 4 cr c a Cr vi es 1 I C A d G 1 r z t r C 0 Ti ta 9 a 4 r e I A 6 r L12 A C kp eA ci 2p rzej 5 r7 e A Z erl Z L c X0 4 c L6 o if gc g L ii4 7Qe e D 0 Cc c5 SI 1 4r in f S a 17th of Nov 1916 My Dear Strong Yrs of 14th wish just hand pray overlook my reference to the wheels in the head these little weaknepe one ought to The only one s self keep to trouble with my heart is that it has been a little expanded and uncomfortable but not particularly danerous state of affricate though extremely inconvenient7 sometimes but abstemiousTrInd very gentle excercise will I think soon bring me back into normal conditions and you can rest assured I am taking great care of myself If I attend the Governors Conference nothing will give me greater pleasure than to stay over a couple of days with you on the way Our collection system has been working under difficulties but we have kept on with coercive measures upon the fellows who would not play the game and yesterday Spokane our chief came into camp My old Bank s Branch at Portland stood out for quite a while but we drained them of gold pretty affectionally and they lastweek announced thatt e they would remit at par for items sent them all this is cheering in this k vale of sin We are to have a visit from his grace the Secretary of the Treasury who is expected here next week I wish we could divorce this Bank from its political connection or make the latter very nebulous I am for sending your friend the Comptroller and Ambasador to Dahomey or some other important place and as for the Secretary I should think that he might have a seat without a vote on the Board like certain English Bishops in the House of Lords I am off for a meeting of Bankers in Central California next week to talk or read about 30 minutes on Suggested Amendments to the F R Act So many of the brethren rush to print new a days to indulge in prophecies of good and evil that one gets tired wasting time upon so much vaporing Do you read all of these lucubrations if so prrty tell me what you think of Mr A C Millers address at Indiana Uncle John Perrin is woceeding to Washington on Sunday to a meeting of F R Agents which will immedklY precede our meeting on 120 e A7 4 i11th These meetings inspiring presence are too much like salt that has lost its savour for my taste Benj Strong Esq Denver Vale Archibald Coins FEDERAL RESERVE BANK OF SAN FRANCISCO A KA INS GOVERNOR 29th November 1916 Dear Strong Yours of the 20th instant came duly to hand and I have also received yours of the 21st with its enclosure which I have not digested yet owing to the fact that I have been out of town and rather busy with various matters I regret to say thatiI found as a result of my trip to Fresno where I had to read a per sitting down being somewhat afraid to stand up that I was not quite up to the shaking one gets on these transcontinental journer so Calkins is going East in my place The meeting is going to be a mighty interesting one too and I think some good results should ensue I am quite sure iAiat the System cannot permanently hold anything of consequence in the shape of gold no matter how much it may be able to accumulate except in so far as the Federal Reserve Note might be changed for thb gold certificate now in the pockets of the people This latest amendment sounds very well but is about as efficacious afs rubbing the stomach of a man who has an ache there with a whiSkey bottle instead of giving him a swig of the inside of the bottle but I of course appreciate the necessity of using all meand to accumulate gold and hope to goodness these farmers in Washington will come to their senses and give us the full equip nt for taking care of ourselves I cannot see that anything short of having the Federal Reserve Note made eligible for reserves both in State and National banks will do the trick We are of cdurse losing gold to Japan and the other countries who have given us value for it we can never stop that little game The rumour which you heard that Japan had to put a prohibitive freight ratelon shipments of Fold from Japan is not I think true it is true to the extent that she endeavoured to put a prohibitive freight rate a year or so ago on shipments to China when Japan was being bled white but things have changed out there as you know No matter how they change however there is nothing that will prevent shipments of gold when the circumstances warrant and the Japs may be very smart but they will never be smart enough to prevent that movement by mechanical means I hope to be writing you tomorrow or next day With kindest regards yours faithfully BENJAMIN STRONG ESQTRE COLORADO DENVER C 417 FEDERAL RESERVE BANK OF SAN FRANCISC 0 December A KA I NS GOVERNOR 4 xe c Fzo9 Dear Strong What a time you are having perched up in your milehigh aerie looking down upon the system and its active angels I have just been reading your letter to the Angel of the Church at San Francisco and return it to you herewith the light thereof I can quite appreciate your descent line of blue New England ancestry In from a long I suppose the humor came in through some maternal strain but the fiendish joy which you took in telling him that his address was the best thing of his which had come to your attention and then proceeded to skin him alive and hang the skin up to dry is worthy of the finest old New England witch ducker from whom you descend in a straight line Needless to say I suppose that I am in hearty agree ment with your views though the Honorable Mr Miller is to be commended for his industry I am in a state of discontent simply because I want to do so many things and can t owing to a debilitated frame We have the branch question on in full vigor in this district just now and if I were feeling up to snuff I would like take a trip up to Seattle Portland and Spokane and do some converting or proselytizing which as I dare say you know very well can not be done unless one puts a good deal of himself into the thing 2 Mr Perrin is at present in Washington and Calkins the Deputy Governor and Clerk the Auditor are in Chicago attending a m of the lesser fleas Calkins to go on later and attend a meeting of the great fleas in Washington on the 11th Cashier has just returned lating from Bordwell our Spokane where he has been confabu with the Spokane outfit and Shepherd the Assistant Cashier is leaving to day for Portland to make a speech at a group meeting So you sea we are fairly active in trying to do our duty to the public I noticed a sudden flurry to 15 although I in the rata for call money yesterday see the close was at 7 It seams like old It gets interesting however when it goes to about times which some of our member banks seem to think Federal Reserve System 50 impossible under the They seam to clothe the System with awful powers in cases of this kind I dare say Treman and his satellites have a good deal to think about and I could wish you were sound in wind and limb and had a hand on the throttle Pray excuse occupied this disjointed screed as I am pretty fairly well and lately have had little time at my disposal I trust you continue to flourish like the green bay horse we read about in the Scriptures and with all kind thoughts believe me Yours faithfully el 3 In 0 Penjamin Strong Jr Es q 4100 Montview Boulevard Denver e Coloradoft r 1 4 tr 49e AL RESERVE BANK AN FRANCISCO A KAI Kt GOVERNOR 1 4 Oeit4 i fri 1 4e4 Xe i4v ed ht rf1ci44 Ap4A t ste i frem e e 4p it h tf 44y cafe a4 r 4 Aa e g lit ettede in 444 1 if y A b k7 6 f iny t t A4 3 frkite 44 0 I IC 4 114 d12 17 ff It g t drn 4 e ttc J a AtA A 4 P ki fria7 14 fpf t lbh f 14 i l A7 5 Air 744e 477 Y1 A e Phi 4 7 we 1 P 4 4 d el fi 7 i 144 ag a pri AVIP vA th Dec 1916 CONFIDENTIAL Dear Mr Strong Mr Kains is in the hospital where he was taken lastTuesday The heart misplacement is apparently a trifling matter He is having hemorrhages and they have not yet succeeded in stopping them or locating the trouble The flow comes from below the bowies X Rays were made yesterday but no report as yet I am sending this word to you although no one in the Bank knows the trouble and think Mr K is at home res ting a few days and no word is being mentioned outside Our two bank manager directors McIntosh and Lynch situation I will write you a line tomorrow will learn more as to the present outlook Today I am to lunch with Mrs K and Yours faithfully Sarah E MacDonald Secretary to Mr K oze3 6 tAA ERAL RESERVE BANK F SAN FRANCISCO GOe r44 A KAI NO GOVERNOR 444 d P1 7 b le f kiArvz y kG r ZeA C A5 0 az t z4 4 z4 6 eal h 44 Ig21eJ 1 144 A zz L Gt 1 VI qfr 44i acid 1 1 0 bp G41z14 6 ec er14 1 f r eplale e p f4 14 f d z 1 II at I G 44 ize4 c 1 Xivtilqf ei 1 1t 6 7 6Z I kip acra e caiz e 74 144f w 124 ite at d 4 e teGif Art p ae waz i J de etAt a 144 AAA 42 a t tt 4t4 fivine 14 ptih e1 2 ayil e P 7 ktyrf X far 714 a r re Aay 44 a1 fl Lc at t a efv tet 3 14 If e14 get v 147aA ht4 th December 1916 Dear Mr Strong Your telegram and your letter of 9th reached here this morning and both will be handed to Mr Kains at the first opportunity The assemblid governors at Washington telegraphed affectionate greetings I fancy Mr Kains does not want much said anent his illness A very yesterday few here know of it I took it upon myself to acquaint you thinking you might be wondering why he did not write and knowing of his regard for you and of his enjoyment of the correspondence between you The trouble has not yet been located The doctors think it may be what I told you but now they say they really do not know They want to X Ray but Mr K is too weak to stand up The hemorrhages have not ceased entirely and he is now absorbing nourishment but not through the stomach His brother is at Mr Calkins our Deputy Govr reaches here tomorrow He is a U S Navy man and is quoted as a Manila Bay hero with the point of death Dewey Since writing the above I have had a talk with Mrs Kains and she says He that today he has been taking food into the stomach and it seems to go well o clock this afternoon but the doctor says had another little weak spell about 3 that is just weakness He had two of those spells yesterday afternoon I will write you again tomorrow Yours faithfully S E MacDonald FEDERAL RESERVE BANK OF SAN FRANCISCO A KA I NS GOVERNOR 41 k 26th March 1917 MAR Dear Jtrong Your letter of 22nd inst is just at hand I have been coming down to the Bank every day now for about a week for a few hours the net result being that I feel a good deal better than I did this time last week I can notice the improvement week by week but cannot day y day I am just in receipt of a long petition signed by the bulk of the active members of the Presidio Golf Club requesting that a lounging room which during my absence had been changed for one of the ladies rooms be restored to its original status so I shall have to pay the Club a visit today or tomorrow which is a sad thing to contemplate for one on a d et in liquid of matters consisting only of milk and vlchy or water and bicarbonate of soda delicious mixtures Don t you think I have tasted nothing else since last December Did you c ive Aiken the word of command in Chicago If we are ever oing to be the National bank we must take a little broader view of certain matters than we have hitherto done I understand that OUT 7orthwest friends are clamouring for branches and that we are to have a visit from one of their igh mightineases from lashington iTr 1211er I presume to go over this matter I have no loubt that we need branches up there in connection with the collection system but they should be branches and not independent banks as laid down in the Federal Reserve Act which badly neec7s amendment in that respect I am delighted to hear of your increase in weight I have not been keeping track of myself in that regard but as to my blood which i was 45 on December 5th last I may ay that it now registers about 95 and considering the fact that some people go through life eomfortably with 80 J is pretty fair This is the time of year that we have the festival and if you came out this way we could chew you miles of white and pin blossoms at this moment I am hoping for the time to come when I can have you out elocsor 2 here and take you about a bit With kindest regards Yours faithfully F Benjamin Strong Jr Escirre 4100 Nontview Boulevard Denver Colorado 7 FEDERAL RESERVE BANK OF SAN FRANCISCO A RAINS GOVERNOR APR6 2nd April Dear Strong Yours of 29th March is just to hand and I I wish I am delighted to hear of your new Golf record but I fancy I shall could whack a ball aS 250 yards once have to wait a couple of years before I try I shall be delighted to see your card after you get going We are at present havino a visit of from fifteen to twenty bankers from Spokane Seattle and Portland in connaction with branch banks the matter having been I fancy unduly hurried up by certain of their Senators bankers in the North at the request of the If we are to handle the collections of this country properly to do so we shall have to have our membership increased by the State banks and in that case we would need branches in Spokane Seattle and Portland but under the present going ahead under one bell the Northern part of this State is at a great disadvantage and if we open only one branch there i8 going to be a great deal But the of bitterness on the part of the neglected cities Board in Washington and the Board here rill just have to skin their own skunks and make the ecision I am delighted to hear that there i a chance of your coming to pay me a visit iJ thrifty Scotch secretary in sending me the beautiful flowers from you at Christmas in view of the comparative cheapness of flowers here reserved some money which she invested in bulbs which were planted in a corner of my garden which I have named Benjamin s bed and some of these bulbs are now in full bloom and ag inst a pretty purple border of heather at the present time I hope you will come out before they fade away but we shall have plenty of other kinds of flowers by that time I have felt quite sure that if our Board in Washington had a little More of Delano s qualities we should get along swimmingly and on comprehensive and beneficial lines With kindest regards A Your Benjamin Strong Jr Esq re 4100 Montview Boulevard Denver Colorado faithfrlly It FEDERAL RESERVE BANK OF SAN FRANCISCO A KAI NS GOVERNOR 11th May 1917 My dear Strong I was delighted to get your telegram today simply to know that you were back in the saddle I thought you said that you would come out to see me before going back to New York about the first of June The weather has been heavenly for the last month or more and the fishing on the HcOloud River is prime I understand I am sending a chap from Liverpool whom I knew in New Orleans over twenty years ago and who dropped in on me yesterday up to the Bollibokka Club where he can revel in the beauty of nature I only wish the question of the opening of three branches and of seeing that our share in this District is done toward the Government financing did not nail me to my des at the moment With kindest regards and best wishes Yours sincerely FEDERAL RESERVE BANK OF SAN FRANCISCO 41 14 A KA I NS GOVERNOR May 11th 1917 MAY Dear Governor Strong Thank you very much for your telegram of today in answer to mine regarding Mr Page s despatch I have telegraphed Warburg as you suggest also stating that what we want badly and at once is a definite pronouncement officially as to particulars of bond issue and terms of payment therefor so as to have official assurance that money will not be injuriously dislocated that everybody worth while was ready and anxious to cooperate actively but that we must have definite terms authoritatively stated as a basis Yours faith ully 941 v Gaverrtr Benjamin Strong Jr Esq re Governor Federal Reserve Bank New York City FROM FEDERAL RESERVE BANK OF SAN FRANCISCO WESTERN UNION POSTAL COLLECT FROM FEDERAL COMPANY MENT RATE TELEGRAM UNLESS OTHERWISE STATED CHARGES CLASSIFICATION CHARGE RUSH May 11 To RESERVE BOARD FEDERAL FEDERAL RESERVE BOARD BUSINESS GOVERN COLLECT WE CONFIRM OUR TELEGRAM AS BELOW Benjamin Strong Jr Governor Federal Reserve Bank Telegrar R G Page received Nei York purporting to represent New York Liberty Loan Committee desiring to exchange ideas each district Owing Steo no committee formally immediately provided Principal people here to lack of official information we have organized as yet th ugh this could he done we had any official particulars to base it on most anxious to cooperate any information you can give us between committees KA LiV Governor Please wire us YOUR PATRIOTIC DUTY BUY A LIBERTY LOAN BOND A C KAINS CHAIRMAN F B ANDERSON LIBERTY LOAN COMMITTEE i 4 HN A BRITTON L LIAM H CROCKER JOHN S DRUM 111A JOHN W EDMINSON HERBERT FLEISHHACKER A P GIANNINI I W HELLMAN lk BANKERS INVESTMENT BUILDING JOHN J MILLER A SECRETARY 742 MARKET STREET t TELEPHONE l 4 444 SUTTER 4917 HENRY T SCOTT RUDOLPH SPRECKELS R M TOBIN GEORGE TOURNY GEO K WEEKS EXECUTIVE MANAGER SAN FRANCISCO Pbc I Of 7 ck9Q r L J 34 C J L 7 1 IMA 6e ce L so A C r 4 If r 6 4 avtc C 25th May 1917 C Dear Strong Yrs of 22 and just to hand I am having a joyous time of it at all May health is sorts of committee meetings I wish I were 25 years younger improving but I am a damaged article yet But I look forward with pleasure to foregathering with you some of these days With all good wishes Yrs A K FEDERAL RESERVE BANK OF SAN FRANCISCO A KA I NS GOVERNOR SUNG DEPT JUN 2 22nd June MEAL limaa CAE Y Dear Governor Strong Permit me by means of this letter to introduce to you Mr Cyrus Peirce of this City President of Cyrus Peirce Company who was formerly President of N W Halsey Company Mr Peirce is taking a trip to New York and other Eastern centres and is desirous of acquainting himself with the financial condition at first hand and if you can do anything to facilitate his desires I shall take it as a favour r Peirce did some fine work here in the Liberty Loan campaign addressing meetings in different places throughout the State and in this City with great effect With kind regards Yours fait fully Governor Benjamin Strong Jr EsqTre Governor Federal Reserve Bank New York City FEDERAL RESERVE BANK OF SAN FRANCISCO RUNG DEPT 4k Ord June 1917 JUN c9d is F Pazi4 rirgsarE My dear btron Luz a I have given Mr Cyt us Peirce of this City a letter of introduction to you as per copy herewith Peirce is a man who was of great assistance in the Liberty Loan campaign here travelling through the country in his motor car delivering his addresses at all the small towns like a patent medicine vendor but very effectively If you can give him a few minutes of your time I shall be very much indebted to you Yours faithfully Benjamin Strong Jr Esqlre Federal Reserve Bank New York City Form 1206 ESTEkiSENA UNION AM TEL WESTERN UNION Massage ight Letter s shoalJ mark an X oppc crass of service desired Di WISE THE TELEGRAM WILL BE TRANSMITTED AS A FAST DAY MESSAGE 110 W1 fir NEWCOMB CARLTON PRESIDENT Send the following telegram subject to the terms on back hereof which are hereby agreed to Receiver s No Check Time Filed GEORGE W E ATKINS FIRST VICE PRESIDENT Boston Wass Aug Benjamin Strong The Lewiston Estes Park Colo For fear the cold blooded New Englanders and other inferior tribes should no ti have conveyed properly our sentiments we desire to send Our love and all good wishes for speedy recovery and joyous reunion Aiken Rhoads Seay Miller Treman Hoxton McDougal McKay McCord Wold Fancher Kains TO THE FOLLOW1k for office TAKE ARE SUBJECT is telegraphed back to the originating AND PA TELEGRAM telegram bey BY THIS COMPANY its face that IS AN UNREPEATED order it REPEATED THIS times the UNREPEATED t any telegram beyond fifty telegram should indicated on as follows ciph the sender of a Unless otherwise Companydelivery or for non delivery of lines nor for errors in ALL TELEGRAMS or delays non delivery el any REPEATED of its in addition telegram and this transmission or the this telegran delivery or for interruption in the working the To guard against mistakes rate is charged sender of delays in the telegram greater valueone ienth the non delivery of whereof one half the unrepeated it is agreed between mistakes or the transmission or from unavoidable transmission or delivery or for valued unless a equal to liable for arising delays in shall riot be is hereby for delays or ho consideration delays in the paid based on such value this telegram The Company same nor for mistakesnor in any case to reach ite valued mistakes or which amount or agreed to be sending the when necessary damages for any sum paid DOLLARS at received for the same unless specially other Compan31 liable for the sum of 1 11 1Y an additional shall not be beyond office in other cities or sending transmission and over the lines of any mile Of such Company for or otherwise telegrams In any event the Company expense endeavor and within one to forward this telegram or less request as his agent and at his negligence of its servants is offered to the ce without liability caused by the at the time the telegram 5 000 population is sent to such offi in towns ofliability at the sender s writing hereonthereof made the agent of the sender offices and if a telegram cent will without telegram is of the Company s office one per The Company is hereby one half mile to make delivery but sixty days after the accepted at one of its transmitting free within to eill writing within classes in addition presented in destination Company does not undertake telegrams until the same are Telegrams will be delivered reasonable price is not limits the at a delivery concerning the agent of the senctor where the claim in each of such respective Beyond these as penalties in any ease COMPAN towns attaches to this Company shall apply to messages contract for him for such niessengets he acts for that purpose TELEGRAPH statutory enumerated below No responsibility liable for damages or c asses of messages WESTERN UNION the INCORPORATED THE under the by one of Tim Cdrepany swill not be PREsiDEMT Company CARLTON transmission of messages Company for transmission NEWCOMB filed with Special terms governing the the foregoing to vary the is authorized of the Company the foregoing terms No employee CLASSES and at date absolutely is subje Cl on the day of its in this respect the tran s obligation for be delivered Letter shall that the Company s remain sufficient timeits date duritig events condition that there shall Letter on the day of but of regto the delivery of such Day priority of the transmission the mission and hours subject to named above foregoing regular office under the conditions is authorized to vary the OF SERVICE 4 FAST DAY MESSAGES service A full rate expedited night ular telegrams of the Company to be sent during the No employee NIGHT MESSAGESA M at reduced rates the ensuing business day morning of the ensuit Accepted up to 2 00 than the morning of NIGHT LETTERS not earlier for delivery on the night message rates to 2 00 A M mesand delivered than standard be charged for the tran Accepted up than the standard dayNight at rates still lower words shall standard day rate for business day standard day rate for 10 DAY LETTERS service at rates lower times the standard of such words or less one fifth of follows The words or less and one fifth and one half A deferred day or less and additional 10 mission of 50 of 50 wordsless as follows One for each sage rates for the transmission 10 words or words shall be charged Letter rate for each additional rate LETTERS LETTERS the initial APPLYING TO DAY this special Day APPLYING TO NIGHT for this special Ni to those enuSPECIAL TERMS the reduced rate for SPECIAL TERMS consideration of special terms in addition of the reduced rate in addition to tI further special terms consideration Company as a the following to In further the following etter service are hereby agreed by the Telegraph Day Letters Letter service are hereby agreed to of the Telegraph Com of such above be forwarded and delivery and crated above the option enumerated Letters may at the addressees and the Company A Day Letters may transmissionthe priority of transmission with 11 and the A Night destination to obligation in such eases deferred service subordinate to Code language be mailed at have discharged its respects o Letters at destination po is in all plain English be deemed toby mailing such Night Code lan t delivery of regular shall be written in Company English to delivery Day Letters s be a by the Telegraph be written in plain prepaid be delivered and such delivery shall Letters shall is not permissible Letter may Company to s a Night authorized to vary the foregoing c This Day same to the addressee the Telegraph the obligation of is not permissible h Company is f the by telephoning discharge of understandNo employee complete subject to the express that a Day undertake not deliver This Day Letter is received Company does litIn FEDERAL INTERNATIONAL BANKING COMPANY N EW ORLEANS 2 99 A KAINS PREsIDENT Th Jc5 Y1 5z itCU 2 47 A XA V Ck Cf 47 FC Ct r 72 CA 1A trYL52 e C I c4 C 1 clA fr G 7 c VA 4v L gAA rvt 6 Arvc r ze 2 I f Q 01 A f t c CV j Ot71 r t f rvvYk ILi5 t t rA 0 f C 0 etrY t c A R 7 42Cr a A c v1 7 ctAA rusz ovvvt invl k If 4 i ctit9 r IA 0 fi o r t 07tA A r 0 6 C 1 71 4C r4v v t r CtviA r tr A o TitK OC C k a 7 St 7 f k e vv 1 FEDERAL INTERNATIONAL BANKING COMPANY NEW ORLEANS Ls v 1 1 AZ C 0 aAA k 2 Z410 Cti 7 k9 erwt Y1 e Act 7 k1 1 I 7 7 Cv r c9 r QJZ h f 7TD fcr kf N A cJ ICA C 4C a MY 7 a ly er f Co t 4 Ci 9 e T c r cr j i fr If 6 c 7 i fr v rA Z Ct 1 X r C y ryyT p z L c L e P r V A ct fr g2C7Z L R MA t4 F7 cf CY S A eVe z ac I 6 rA 1 ty Q cl e e ic 91c r C6 o c r vv k f 1 1 v k a 71 7 C 0 1 e t 0 A TAP P A Q r Y er 7 L A a eThr Se tr7 r A5 A y Ve 3 SA R V CC q t C crf C z otzr ITiv frv 2 zkpf44 tw 21st July 1923 Dear Strong Some time ago Kenzel paid New Orleans a visit and we had an opportunity to talk over bygone days and I was sorry to hear from him that you were again in the hands of the Philistines and as one who has suffered much from many of them I desire to express my sympathy in the hope that you will soon be doing business again at the old stand As for me I am in my 58th year playing a game of golf every morning before breakfest And though I have scars of bygone conflicts of some organs which might improved upon I am reasonably cheerful unregenerate and ready for anything from pitch and toss to manslaughter I am sorry to note the tendency of the Federal Reserve people to get implicit in politics which if it persists may spoil a splendid machine which has been a great use in the past and will continue to be if let alone I am presiding over the destinies of a little export and import Bank in reality an acceptance house and it is childs play but as I am no longer in the first flush of youth but rather getting into second childhood childs play suits me quite well and gives me enough occupation to keep me interested fortunately my little economies in former days and their results rended me immune from the necessity to hustle any more but a job like mine is like keeping the cows out of the cherry trees I am on the eve of taking my american wife up to the little town London in Canada where I was born and where they are having a reunion this year of old boys and I suppose we will have a most interesting time of it then we shall go to Toronto and Ottawa Montreal then to New York for a couple of weeks then back to this sultry paradise Cotton at the moment looks as if it might go down as crop prospects are fairly good and people abroad will I fancy go naked another year if necessary rather than promise to pay more than 25 per lb for it If you haNre time and inclination drop me a line and tell me how you are perhaps I might be able to prescribe some useful balm for the wounded warrior I remember with pleasure that though your efforts some years ago at Denver I was enabled to slake my thirst by the grace of a charming lady Mrs Whited I think was the name I don t know how I remember this but I have a villainous memory I sometimes wish it were not so good Pray forgive this disjointed screed written to convey my sympathy and friendship Believe me always Your affectionate servant who kisses your feet as our Spanish friends say Archi Kains FEDERAL INTERNATIONAL BANKING COMPANY NEW ORLeANS 47 C A IAIN5 PRESIDENT February 13 f192501 ACT NOWLEOATZ 1 FilB fl s 1925 Dear Strong Many thanks for your kind note of the 9th instant anent the Down Town Association I have however taken the veil being sixty years of age and am now retired from business altogether Our stockholders last month decided to liquidate this institution which interesting operation should be completed in sixty days Henceforth I shall live on my fat and endeavor to get my score under ninety and also occupy myself in other good works I am contemplating the erection of a modest but useful house in Ottawa just adjoining the Vice Regal Residence on the Ottawa River from which I can radiate sometimes South sometimes to California and other times to England As far as clubs go in New York I belong to three which will render my former desires in respect of the Downtown Association supererogatory and I shall be much indedted to you if you will be good enough to withdraw my name Hoping to see you in Ottawa some su4mer day irLien you feel like sitting loose to the world and with kindest regards Yours faithfully AK WW Ben Strong Esq Federal Reserve Bank New York City I I FEDERAL INTERNATIONAL BANKING COMPANY NEW ORLEANS A RAINS February PRESIDENT Dear Strong Many thanks for your kind favor of 16th instant and the good wisnes therein contained I am full of trouble just now as a niece of mine is coming down from the North to participate in the Carnival festivities next week and I know I should accompany the chauffeur to meet her at the train but this will prevent my playing my usual Sunday morning game of golf which will upset three other old guys who will vilify me unsparingly so you see even the pleasantest situation has its drawbacks With kindest regards You s faithfull 4 For dongas rocks and scuffled greens Give me the links up North The whins the broom the thunder of the surf The three old fellows waiting where I used to make the fourth I want to play a round on turf AK EE Benjamin Strong 2 sq 3 5 Liberty St New York City OOVERNOR S OFFICE RECEIVED Rs 2 ED